Nil market activity in China due to festive holidays and the efforts of the Chinese government to lower steel production in that country have acted as the twin factor for dampening the Coking Coal market atmosphere in Australia.
Steel production will decline in China as the government of that country has mandated production cuts. In the first phase of the production cut, steel production will be halved in Tangshan, the largest steel producing city, situated at the north eastern region of China. In the city, steel production will be lowered by 20 MnT, equivalent to approximately 7.5% of the entire steel production in that country. According to the government orders, similar production cuts will also be implemented at Shijiazhuang, Anyang, and Handan—the other steel producing cities in China.
The warranted steel production cuts have resulted in prevalence of a bearish sentiment among the steel makers in that country; as such demand for Coking Coal moderated in Australia, the main import market for Chinese steel mills.
Offers for the Premium HCC have declined by around USD 8.5/MT to around USD 189.50/MT FoB Australia over the week-ago offers. However, offers for the 64 Mid Vol HCC have remained almost steady at around USD 153.05/MT FoB Australia in comparison with the offers in the week last.
For Indian buyers, these offers translate into: USD 202.70/MT and USD 166.25/MT respectively on CFR India basis.
In the meantime, the Hay Point Terminal’s berth no. 1 is being idled for maintenance until 4Nov’17.
The Department of Planning and Environment of the Australian government has recently allowed limited mining operations to commence at the Appin coal mine, owned by South32. The department had in May’17 ordered closure of the mine for carrying out investigations on high levels of gas concentrations in the mine.
Leave a Reply