Prices for ex-Australia premium hard coking coal (PHCC) have rebounded in a new deal and in bids at the end of this week. But market sources believe that this is due more to the excessively low previous levels rather than due to stronger fundamentals. Supply from Australia has been on the rise, while China’s appetite has also gradually revived, which will likely keep prices fluctuating near the current levels.
A deal for 40,000 mt of ex-Australia Goonyella mid-volatile PHCC was done at $320/mt FOB for December 16-25 laycan yesterday, November 23. The sale was done by an international trader. It is up from the previous booking at $304.5/mt FOB and some bids at $295-310/mt FOB. Indian mills are still in the market, but most of them have very little interest in December laycan cargoes, and will start to book for January shipments in a week.
Moreover, there have been at least two to three cargoes of low-volatile PHCC on offer this week and it seems that Australian miners have witnessed an improved situation in shipments from Hay Point. According to sources, the suppliers’ price idea is around $320-330/mt FOB, while one bid for low-volatile coal from a trader has been heard at $315/mt FOB on GlobalCoal. Chinese mills, who are interested in low-volatile PHCC, are heard to be ready to accept $310/mt FOB. The tradable level is at $320-325/mt CFR China at the moment for PHCC and new deals are expected shortly. The mining inspections recently commenced in China’s Shanxi Province may last for the coming two months at least, sources have said, limiting domestic coking coal supply and pushing mills to source from imports.
Russian suppliers have also been trying to push up prices. A deal for ex-Russia PCI has been done at $172/mt CFR to Southeast Asia this week, while offers to China have increased to $170-175/mt CFR at the lowest, versus $162/mt CR in the previous deal.