Bearish sentiments continue to weigh on coking coal prices

As most global steelmakers remain cautious towards new bookings of raw materials amid low margins, coking coal prices are expected to trend down further. “The negative outlook for finished steel, coupled with the availability of low-priced offers from Russia appear to be weighing on sentiments in the coal market. With suppliers being flexible, most buyers are maintaining a watch-and-see stance in anticipation of even cheaper offers,” a market source stated.

In particular, the latest offer for 75,000 mt of ex-Australia premium mid-volatility hard coking coal (HCCA), unbranded, with laycan in August, at $265/mt FOB has failed to attract any buyer. Meanwhile, one buyer is said to have been seeking to pay $210/mt FOB. Besides, another offer for 75,000 mt of ex-Australia premium low-volatility hard coking coal (HCCLV) Peak Downs at $292/mt FOB, with August laycan, has remained without any feedback.

Australian coking coal suppliers may seek some support from the worsening of weather conditions in Australia, though any success is highly doubtful given the current market conditions. Specifically, on Tuesday this week, the main rail line delivering coal to Australia's Port of Newcastle was shut due to heavy rainfall, for the following 48 hours at least.

Meanwhile, at Singapore Exchange (SGX), the price downtrend has gained momentum, with ex-Australia coking coal prices for July contracts on July 7 down $14/mt or 5.02 percent from previous levels to $265/mt, while for August contracts have been settled at $260/mt, down $16.5/mt.