Prices of imported coking coal variants have staged a strong comeback this week after the continual sliding trend so far this fiscal.
On the global front, the overall metallurgical coal market seems to be poised for further strength, primarily owing to the prospects of end-user demand growth in the Chinese construction sector.
Notably, China’s first-quarter 2018 steel output increased 5.4% to 212.2 MnT from the same period last year notwithstanding the winter restrictions placed on steel production in the northern parts of the country.
Moreover, China’s total coal production, including both thermal and coking grades, has dropped over the past few months, compelling the Chinese steel makers to rely heavily on seaborne coals. Accordingly, the country’s coking coal imports have surged 38% M-o-M to 4.02 MnT in Mar’18 from 2.91 MnT in Feb’18, according to customs data released on 24 Apr’18.
Furthermore, the prolonged price gap existing between met coals domestically produced in China and that of more competitive imported material has begun narrowing. Consequently, Chinese mills are reportedly resuming their met coal purchases from the seaborne hard coking coal spot market, thereby uplifting the commodity prices.
On the pricing front, latest offers for the Premium Low-Vol HCC grade are assessed up by USD 8.50/MT to USD 187.50/MT FoB Australia, relative to the week-ago offers. Also, current offers for the 64 Mid-Vol HCC are up by USD 2.90/MT to USD 169.75/MT FoB Australia.
On CFR India basis, these offers translate into USD 201.65/MT and USD 183.90/MT respectively.
CFR China prices have also gone up by USD 10/MT to USD 194.50/MT.
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