Coking Coal Price Fall Continues on Ample Supply, Moderate Demand

Coking Coal prices have continued to fall as supply became steady without any hindrance. At the same time, there has been no substantial increment in demand. The reason: moderate import demand from Chinese steel makers.

OFFERS DESCEND FURTHER

Coking Coal offers from the key international market have declined further as supply was normal, without any interruption.

The latest offer for the Premium HCC is reported lower by USD 10/MT at USD 168/MT FoB Australia over the rate reported the week last. The fresh offer for the 64 Mid Vol HCC is reported at USD 148/MT FoB Australia, lower by USD 17/MT than that in the week last.

Source: CoalMint Research

These offers translate into: USD 182/MT and USD 162/MT respectively on CFR India basis.

MARKET DEVELOPMENTS

Demand for the coal from Chinese steel mills have not strengthened despite the downfall in the prices as the steel makers there had stocked the coal heavily before the occurrence of the cyclone. With Coking Coal stocks available with the Chinese steel makers, there was no spurt in imports of the coal. Moreover, steel production in China is undergoing a slowdown, discouraging stocking of the coal inventories among the steel producers.

In China, the atmosphere in the steel industry is gloomy as car sales have slumped, real estate development has started to lose momentum, which are indicative of demand for steel to slacken in that country that will erode consumption of Coking Coal.

South32, a global coal miner, has recently suspended mining operations at its Appin coal mine due to occurrence of an incident involving escalating gas concentrations inside the mine. The incident forced the company to evacuate all the mining personnel, suspending operations until resolution of the matter. The Appin coal mine, situated at Illawarra in the New South Wales region of Australia, produces Coking Coal, which is exported.

PRICE DECLINE TO CONTINUE

Discussions with some Coking Coal buyers by CoalMint have revealed that the price will continue to decline. They expected the spot price of the Premium HCC to recede to around USD 155/MT.

Supply will increase substantially in the days to come, after all the producers in Australia lift force majeure, which they had declared after the occurrence of the Debbie cyclone incident. Remarkably, Coking Coal production in USA, Russia and Canada also is in the rising mode that will exert downward pressure on the prices in the near future.

IMPORTS

There was no retardation in Coking Coal imports in India. Imports have continued to land at Indian ports. During the first half of May'17, around 2.04 MnT of the coal was imported in the country, data compiled by CoalMint Research shows.

In discussions with a few reputed buyers, CoalMint learned that the import tendency among the country's Coking Coal buyers was strong, and the imports in the country will escalate in the coming days.