Prices for ex-Australia premium hard coking coal (PHCC), which had posted an increase to $252/mt FOB in one deal early this week, have returned to almost the same level as last week and market sources do not exclude a further gradual softening.
Market sources have said that the reasonable level for suppliers to push volumes should be at around $235-240/mt FOB at the moment, versus a deal for 40,000 mt of mid-volatile Goonyella PHCC at $252/mt FOB on Tuesday. A few sources said that the higher-than-expected price in the contract was due to the early July laycan, when “the market is expected to improve.” The SteelOrbis reference price for ex-Australia PHCC has settled at $238/mt FOB.
There have been some negotiations for ex-Australia mid-volatile PHCC at $250/mt CFR in India, translating to around $235/mt FOB or slightly below. Though no deals have been confirmed so far, this level has been confirmed by a few sources as the real market level.
“There are still plenty of cargoes in the market. I would say that fundamentally May and June will be not that good,” a trader said. Also, demand support has been weaker as Indian mills, carrying out annual maintenance works, are not in a hurry, while the improvement in mood in China has been short-lived.
A deal for ex-Russia PCI has been done at $144/mt CFR to China this week.