Ex-Australia coking coal ends week $5/mt higher, further rises difficult

Friday, 12 January 2024 14:12:38 (GMT+3)   |   Istanbul
       

Prices for ex-Australia premium hard coking coal (PHCC) have increased by the end of this week, adding $5/mt compared to last week. However, market sources believe that prices for coking coal will fluctuate in a limited range in the near future as, even though supply is still on the low side, it is not so critical as to push prices up significantly, at least for now.  

The main Australian miner managed to sell 40,000 mt of mid-volatile Goonyella PHCC at $338.15/mt FOB for February laycan, which is up by $5.15/mt from yesterday’s assessment and from last week, while earlier this week bids from some customers were already at a higher level of $335-336/mt FOB. “This is for India, as mills are still asking for this material. Others will not pay higher,” a trader said. After two cyclones in Australia in December and the heavy rains that continued in January, the queues at the main Australian coking coal ports have persisted or have even increased further, with 44 vessels waiting at Gladstone and 53 at Hay Point and Dalrymple Bay Coal Terminal. This makes sentiment in the Australian market supporive and most major sources agree that the price should stay above $330/mt FOB this month.  

However, a further sharp increase in coking coal prices from Australia is also doubtful. Some bids from Japan for low-volatile material have been heard at $310-315/mt FOB this week, while the highest possible for Southeast Asia is $330/mt FOB, according to some sources. Moreover, with the recent declines in local coking coal prices in China in tandem with softening steel quotations and the iron ore price decline, the tradable level for imported coking coal has lost another $5/mt over the past week, coming to $325/mt CFR at the highest.  

Chinese buyers will likely maintain their focus on buying cheaper Mongolian and Russian materials, especially after Russia canceled the export tax for most types of coal export yesterday. A deal for ex-Russia PCI was heard at $148/mt CFR early this the week, down further from $149-153/mt CFR last week. In late December, sellers were targeting $160-165/mt CFR, trying to offset the export duty, which was based on the exchange rate of the ruble (from to four percent to seven percent, while it stood at 5.5 percent recently).


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