- Met coal prices remain stable amid weak Chinese demand
- FOB prices firm, softer CFR China reflects subdued buying interest
Global metallurgical coal markets remained rangebound as participants digested recent trades and monitored the ongoing Middle East conflict. Premium hard coking coal held steady in Australia while softening in China. Low-vol hard coking coal saw a sharp upward adjustment following a confirmed trade, while met coke prices edged higher on tight Indonesian supply. Sentiment remained split between supply concerns and demand caution.
Premium low vol: Steady FOB, weaker china
Premium hard coking coal held steady FOB Australia at $236.80/t, but CFR China softened $1/t to $219/t. Chinese domestic prices fell amid weakening import appetite. The Dalian Commodity Exchange declined over 5%, further dampening seaborne buying interest. Tradable levels for Australian material were heard lower, with a noticeable gap between seller expectations and buyer bids. Chinese arbitrage traders remained largely absent, creating a stalemate in the CFR market.
Low vol hard coking coal: Trade resets levels
A 40,000 t cargo of Australian LVHCC Daunia traded at $195/t FOB Australia for April loading, with the laycan brought forward. This transaction reset tradable levels for the segment, driving the assessment up $5.20/t to $191.20/t.
However, CFR China LVHCC fell $1/t to $203/t, reinforcing weaker Chinese import demand despite the FOB strength. The premium for Daunia over benchmark specifications narrowed, reflecting reduced buying urgency from China.
Met coke: Indonesian strength continues
A 50,000 t cargo of Indonesian 65/63 CSR coke traded at $255/t FOB Indonesia for May loading, pushing the assessment up $2/t. CFR India prices followed to $278/t, also up $2/t.
Chinese domestic coke saw a long-delayed price hike of RMB 50-55/t finally accepted by steelmakers after being initiated in late March. The delay in acceptance indicated underlying resistance from buyers.
PCI: Quiet but firm
PCI markets saw modest FOB Australia increases but flat CFR China pricing. Low-vol PCI rose $1/t to $159.50/t FOB Australia, while CFR China held at $137/t. Mid-vol PCI similarly edged up $1/t to $154.50/t FOB Australia. Russian material was heard available to India at competitive levels.
Atlantic market: Steady but tighter
US coking coal assessments remained unchanged, with low-vol HCC at $195/t FOB US East Coast. However, sustained buying from India and South Korea has depleted producer inventories that were significant just a month prior. South Korean demand was particularly strong for both low- and high-vol coals, with buyers actively seeking cargoes on index-linked terms following recent price increases.
Underlying market factors
Chinese weakness remains the dominant bearish factor. Domestic premium coal prices fell, and exchange-traded futures declined sharply. Chinese traders stayed on the sidelines, unwilling to bid at levels attractive to sellers.
Indian gas disruptions from the Middle East conflict have affected downstream steel operations. While hot metal production has not yet been cut, rising finished steel inventories could force reductions. Indian buyers remained resistant to higher coking coal prices.
Australian fuel supply risks present a potential bullish catalyst. Smaller miners without diesel stockpiles could face disruptions if the conflict persists, though major producers maintain several weeks of inventory.
Indonesian coke supply remains tight, supporting the $2/t price increase and setting a firm benchmark for Q2 pricing.
Outlook
The met coal and coke markets face competing pressures. Chinese weakness and Indian gas disruptions weigh on demand, while Australian fuel risks and tight Indonesian coke supply support prices.
Near-term, prices are likely to remain rangebound until clearer direction emerges. PLV FOB Australia has support at $235/t and resistance at $240/t. Indonesian coke should remain supported above $250/t FOB. A sustained break below $215/t CFR China for PLV would signal deeper weakness.
Leave a Reply