Coking coal prices ex-Australia have dropped sharply in the second half of September, while trading activity has been at low levels this week as most buyers have been waiting for a clearer market direction. Premium hard coking coal prices have lost $7/mt since late last week, coming to $153/mt CFR, and hard coking coal prices have fallen to $130/mt CFR, down $11/mt.
Chinese customers have been limiting buying of import material, even it is much cheaper compared to domestic coking coal. Lower coke plants utilization rates have added to the situation.
Though coking coal prices have already lost 15 percent since the beginning of September, the further price trend after the Chinese National Day holiday is unclear. If demand from China fades in the fourth quarter due to restrictions by the Chinese government aiming to cap coal imports at last year’s level, a further price decrease is inevitable, market sources believe. But, on the other hand, steel production is expected to stay at high levels in winter, which can bring some support to the prices of the raw material.
In the January-August period of this year, China imported 52.99 million mt of coking coal, up 19.8 percent year on year, with this figure not far from the 65 million mt of coking coal imported in 2018.
Coking coal futures at Dalian Commodity Exchange have dropped by 4.4 percent or $8/mt this week, reflecting bearish sentiments in the market.