Trading activity has been limited in the Australian premium hard coking coal (PHCC) market this week and prices have been under pressure with plenty of June laycan cargoes still seen in the market, while buyers have been voicing lower bids.
In particular, offers for mid-volatile Illawarra, Goonyella and some other brands from Australia came down from $241-243/mt FOB on Monday and Tuesday to $238/mt FOB for 75,000 mt of branded premium mid-volatile material at GlobalCoal on Wednesday. Also, a deal at $250/mt CFR to India was rumored on Thursday, which translates to around $235/mt FOB. This has not been confirmed by the time of publication as on Friday the tradable level assessed by market sources is already at $230/mt FOB. “Many suppliers don’t want to give fixed offers as it will push the market down further,” a source said. Bids voiced at GlobalCoal for June laycan are still very weak, at $210-220/mt FOB at the highest.
“The Indian market seems range-bound at the current levels. Elections are going on and usually at this time there won’t be any major moves and most buyers and sellers will probably prefer to wait till the results are available,” a trader said. Offers for ex-Russia PCI to India have been at $150/mt CFR this week, but no deals have been reported.
The SteelOrbis reference price for ex-Australia PHCC has slipped to $233/mt FOB, down by $5/mt over the past week.
In China, the tradable level for PHCC has been assessed at $250/mt CFR, down by $7.5/mt on average over the past week. “$250/mt CFR, if it is for high-quality PLV [premium low-volatile coal], is an acceptable price, and the prices of many Australian HCC [hard coking coal] also exceed $200/mt CFR,” a trader said. But offers for ex-US prime Blue Creak 7 coking coal were reported at $260/mt CFR in the middle of the week.
“The current Chinese market is volatile. End-users and sellers are in a wait-and-see state. Due to the previous continuous price increase for coke, the Chinese market is expected to have two rounds of price reductions, including the price reduction of Anze PLV [local premium low-volatile coking coal] at the beginning of this week, and the second round of price reduction is expected to start next week. However, thanks to the good futures market expectations, the second round of price reduction in China's coking coal market may be difficult to implement at present, and many end-users need to replenish inventory,” a source said, sharing the better sentiments which prevail in the Chinese market.
A deal for ex-Russia PCI has been done at $148/mt CFR this week, up from $144/mt CFR last week, and new offers have been heard at $150/mt CFR. Hard coking coal from Russia has been on offer at around $190-193/mt CFR.