Prices for ex-Australia premium hard coking coal (PHCC) prices have declined a little after one steel mill re-exported a cargo purchased from an Australian miner earlier. However, the outlook has not turned bearish yet, as market sources are waiting for Chinese buyers to return from their holiday, and, since expectations for the steel market are rather optimistic, coking coal prices may also receive support.
A deal for 70,000 mt of ex-Australia Peak Downs low-volatile PHCC was signed by a major European steel mill at $204/mt FOB for November laycan, down from the previous deals by the miner to Chinese traders at $207.8/mt FOB on average. Market sources believe that, if there are more re-export deals from mills in Europe or Asia, coking coal quotations may be impacted by a margin of a few dollars. However, in general, expectations are that the price trend will remain stably bullish after China resumes work.
This week, even though trading has been halted in China, some mills in Hebei Province have accepted another round of increases in local coke prices, with prices up by RMB 55/mt. The previous import PHCC deal to China was at $211/mt CFR before the holiday, but market sources agree that $215/mt CFR could easily be achieved after the holiday.
On October 3, operations at Glencore’s Oaky Creek Coal underground mine were suspended after an accident led to the death of a worker. Though market sources do not see any likely impact on the supply of PHCC, this news also supports the idea that coking coal prices are unlikely to decline in the near future.
