Being stable for couple of weeks, Met coal market has again started witnessing bearish sentiments owing to sluggish demand in China.
Chinese traders are showing dull activities in the market due to winters in the country. Alongside, approaching a week long holiday on the occasion of Chinese New Year will further show timid trading activities. This in turn may lead to further downfall in Met coal prices.
In addition, buzz about Chinese steel industry instigating curb in crude steel production to large extent, aiming to control overcapacity. This has prevailed bearish sentiments in Met coal market as coking coal serves as a raw material for one of the materials used in steel production.
Bearish sentiments in Chinese market has affected Met coal trading worldwide. As a result, all the other importers including India are enjoying fall in prices.
SteelMint assessed that currently, Premium HCC offers from Australia are assessed at USD 80-81/ MT, CFR India; registering a decline of about USD 1-2/MT against USD 82-83/ MT, CFR India in preceding week. Similarly, cargos of Aussie’s HCC were heard to be available at USD 78-79 /MT against USD 78-79 /MT a week ago.
Qty in MnT
Price- USD/MT FoB (AustralianPHCC)
Source- SteelMint
[su_pullquote align=”right”]An Indian importer told SteelMint, ”Prices may fall further as Chinese steelmakers have ample stock. Moreover, sellers are determined to sell their cargos and selling aggressively due to week long holidays in China.”[/su_pullquote]
Also, slipping crude oil prices have led to drastic downfall in vessel freights. Currently, vessel freight from Australia to India for Panamax vessel is assessed at around USD 5-5.5/MT, registering a decline of about 23% in month’s time. Currently crude oil prices are hovering in the range USD 25-26/barrel against USD 31-32/barrel, a month ago.
Fall in crude oil prices is somehow aiding Indian importers, who would have rather faced expensive imports due to devaluing INR.
It is to be noted that India, the 3rd largest coking coal importer, imported about 4.2 MnT of coking coal in Dec’15
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