Australian Coking Coal: Prices continue to tumble on sluggish steel demand
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Australian premium low-volatile (PLV) hard coking coal (HCC) prices have tumbled by over 5 per cent since the beginning of last week, although mid-volatile HCC prices have held almost steady over the same period.
The Indian market has been sluggish for quite some time now, largely in part due to the bearish downstream steel industry.
Operating profit margins of the domestic steel industry have been declining steadily over the last four quarters, from 22.6% in Q1 FY19 to 18.2% in Q1 FY20.
Further, profitability for steel companies are expected to deteriorate in the midst of a slowing local consumption growth rate and a weakening global outlook -- official statistics indicate that domestic steel consumption growth weakened from 6.4% in Jun'19 to 3.5% in Jul'19.
With the slowdown in India's steel sector, several companies have become amenable to cut production in response to lower demand.
PRICE ASSESSMENTS
Latest offers for the Premium HCC grade are assessed at around USD 143.75/MT FOB Australia, lower by USD 4.25/MT than the average rate of USD 148/MT prevailing during the week gone by (9 Sep - 13 Sep'19).
Offers for the 64 Mid Vol HCC grade are assessed at around USD 138.15/MT FOB Australia.
For Indian buyers, the above offers amount to USD 159.85/MT and USD 154.25/MT respectively on CNF India basis.
Pulverized Coal Injection (PCI) & Semi Soft Coking Coal
| FOB Australia | CNF China | CNF India | |
| Low Vol PCI | 97.65 | 113.00 | 113.75 |
| Mid Tier PCI | 95.65 | 111.00 | 111.75 |
| Semi Soft | 83.15 | 98.50 | 99.25 |
N.B.: All prices are in USD/MT
