Australian coking coal prices drop on dampened market sentiment
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Australian premium hard coking coal prices in FOB markets decreased marginally throughout the week, on subdued demand with buyers waiting on the sidelines being cautious amid high volatility.
Prices had earlier fallen sharply last week following ArcelorMittal's sell tender concluded at $126/t FOB Australia for 75,000 t of March-loading Goonyella.
At present there is relatively better demand for April laycan cargoes, as demand for March-loading cargoes has thinned out in consideration of the recent unclear price movement.
The price gap between offers and bids has presently widened after buyers lowered their bid levels in view of negative short-term sentiment in ex-Chinese markets.
Downbeat market sentiment hints at a cloud of uncertainty
Lately, spot trading activity in the seaborne coking coal market has remained low due to weak buying interest from most end-users in India among other Asian importers. Indian steel mills and coke producers are showing no urgency to procure seaborne coking coal because most of them have already secured cargoes earlier.
Buying interests from both European and Asian countries including Japan and South Korea have lately mellowed down on account of relatively weak downstream demand for steelmaking raw materials.
Besides, market participants are observing the prevalent weather conditions and potential supply disruptions in Australia.
India Coking Coal Import Shipment Vessel Lineup
CoalMint's latest vessel lineup shipment data (as on 01 Mar'21) reveals that a total quantity of 1,661,280 t of Australian coking coal is expected to reach various Indian ports by 16th Mar'21.
602,000t Dhamra (Odisha)
173,928t Ennore (Tamil Nadu)
82,352t Gangavaram (Visakhapatnam)
75,000t Haldia (West Bengal)
200,340t Jaigarh (Maharashtra)
79,200t Kandla (Gujarat)
81,205t Krishnapatnam (Andhra Pradesh)
83,260t Mormugao (Goa)
233,795t Paradip (Odisha)
50,200t Vizag (Andhra Pradesh)
Price Assessments
Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $122.00/t and $117.00/t FOB Hay Point, Australia.
For Indian buyers, these prices amount to $144.20/t and $139.20/t respectively on CNF India basis.
Australia-India dry bulk freight rate is currently assessed at $22.20/t (+10.4% w-o-w) for delivery by Panamax vessel class.
Outlook
Short-term market outlook remains bearish on limited buying interest, as buyers became cautious and retreated to the sidelines citing increased price volatility seen in the spot market over the recent past.
Australian coking coal prices are largely anticipated to remain at lower levels amid continued pressure from oversupply until China's informal import ban on Australian coals is lifted.
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By Aditya Sinha
