Ex-Australia coking coal prices to rise in short term, market inactive despite fatal accident

Friday, 19 January 2024 16:59:45 (GMT+3)   |   Istanbul
       

This week, ex-Australia premium hard coking coal (PHCC) prices have been relatively stable, though the mood has become more bullish after the fatal accident at a major Australian mine on Monday, January 15.

On the date in question, a fatal accident occurred at the Saraji mine of BHP Mitsubishi Alliance (BMA), and since then “operations at Saraji were suspended and are expected to progressively restart over the coming days,” the miner said on Thursday this week. This is expected to add to supply concerns for shipments from Australia, which had already increased due to queues at a few major ports and due to lower production. In particular, in the first half (ended in December) of the fiscal year 2024, BMA produced 17 percent less coking coal year on year, with output totaling 11.3 million mt. And the full year guidance has been announced now at 23-25 million mt, versus the previous 28-31 million mt, which is assessed as a significant drop.

An offer for 40,000 mt of ex-Australia mid-volatile PHCC was reported at $337/mt FOB in the middle of the week, $1.15/mt below the previous deal for a similar grade late last week. At the same time, a few bids from traders and Indian customers for mid-volatile PHCC have been at $310-320/mt FOB during the week. Despite the slight softening in offers and still insufficient bids, market sources do not think that ex-Australia coking coal prices will post any sizable losses in the near future. “Once buying from India revives, I expect prices to reach $350/mt FOB or higher,” a trader said.

The tradable level for imported coking coal in China has remained relatively stable at $325/mt CFR. An offer for ex-Russia PCI has been circulating at $147/mt CFR China, down by $1/mt from the previous deal.


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