Bids for ex-Australia coking coal have been constantly increasing this week, adding in total $92/mt since late last week as more and more buyers have been looking for material and they are expecting further increases, and so the market has been in a panic.
In particular, on March 4, bids for Australian premium low-volatile hard coking coal for April shipment surged to $520/mt FOB, then to $540/mt FOB and even to $550/mt FOB just during the day. Bids were at only $500/mt FOB yesterday. This means that the high demand has led to an increase as high as $92/mt between a deal done late last week and the highest bid seen today. On February 24, a contract for 75,000 mt of ex-Australia premium coal was done at $458/mt CFR for April laycan. According to market sources, the ex-Australia premium coal price could reach $600/mt FOB in the future in the current conditions.
For May laycan, bids have been slightly lower, at $470-510/mt FOB today.
“Almost every commodity has surged, on the backdrop of the potential supply shocks from the war apparently,” a source said.
But gains in China have been much less. This week, the price for premium import coking coal is at $402/mt CFR. One deal from a Chinese mill for 85,000 mt of Canadian coal was heard at the index for another buyer in China on March 2.
In the PCI segment, prices from Australia have also surged, to $450/mt FOB with no deal reported so far. “The recent surge is mainly because Newcastle thermal coal traded at $415/mt FOB,” a source said, adding “so naturally PCI suppliers will aim for higher, if not the same level.” He also told SteelOrbis that “no one is daring to take Russian shipments now given the sanctions. Maybe Russia’s last resort will be China.”
According to sources, Mechel sold “a cargo of Russian low-vol PCI to Winsway” at $280/t CFR China for prompt laycan.