Though overall trading in the Australian premium hard coking coal (PHCC) market has been rather quiet over the past few weeks, market sources believe that prices may go up further due to disruptions in supply caused by heavy rains and a cyclone risk in Queensland.
The reference price for ex-Australia mid-volatile PHCC has remained at $220/mt FOB, where it settled in late December. Only some deals were heard in last days of December and early this week at $237-239/mt CFR in India for January shipment.
But market sources said that Indian demand may persist amid the recent strong uptrend in the steel market in India. Market sources said that Australian miners may target $230/mt FOB in the next deals or even above, if the supply disruptions are bigger than expected.
As announced on January, 8, two major coking coal terminals in Australia - Dalrymple Bay Coal Terminal and Hay Point Coal Terminal – suspended operations “with next berthing tentatively scheduled for Monday 12 January,” official sources said. Abbot Point Coal Terminal has also been closed with the same resumption date as there is a high risk of a tropical cyclone developing near northeast Queensland at the weekend. Some market sources believe that the weather conditions, together with the already reduced availability of coking coal for January and February shipment, will be a good reason for sellers to hike prices again.
There has been no support for Australian PHCC prices from the Chinese market as the tradable level is still $205/mt CFR at best. But surging coking coal and coke futures in China this week have also supported the mood. Moreover, some tonnages of hard coking coal from Australia have been heard at $190-195/mt CFR this week.