On June 26, SteelOrbis reported ex-US grade A coking coal at $143-148/mt FOB US East Coast (USEC) and grade B coking coal at $127-131/mt FOB USEC. This translated to US origin grade A coking coal prices at $154-159/mt CFR Rotterdam and grade B coking coal at $138-142/mt CFR Rotterdam. At the time, premium hard coking coal traded at approximately $152-156/mt CFR China.
Due to the continued strength in the Chinese domestic market and resulting increases in their offers to the export market for billet, slab, flat steel and all other steel goods, seaborne premium coking coal trades have been recently concluded above $160/mt FOB Australia. Ex-Australia offers are heard as high as $170/mt CFR China, although trades at this level are not yet known.
The positive sentiments and outlook are buoying the US coking coal export market and grade A coking coal is now being offered at $170-175/mt CFR Rotterdam and grade B coking coal at $155-160/mt CFR Rotterdam. Grade A has increased $16/mt from the previous range while grade B has increased $17-18/mt from the previous range.
A source believes prices will be maintained at generally the same levels throughout the summer on strong Chinese steel fundamentals, including strong steel production with tighter domestic coal supplies. Another source expressed concern about the sustainability of the Chinese rebound in their domestic market along with continued higher coking coal output that may place pressure on prices. Supply is expected to increase not only in Australia but also in the US and Canada over the course of this year and into 2018. Although, some of the domestic supply growth is expected to satisfy increases in demand within the US and Canada.