Offers for ex-Australia premium hard coking coal (PHCC) have dropped further this week as suppliers have been pressured by weak demand and the sharp fall in steel prices in China. As a result, the current FOB prices are the lowest since 2021.
An offer for 73,000 mt of mid-volatile branded PHCC was heard at as low as $185/mt FOB for late September laycan on Thursday, though earlier in the week suppliers had all been targeting above $195/mt FOB. Market sources said that, after prices the crossed $200/mt FOB mark, buyers became more bearish and were cautious in their purchases. This has resulted in many cargoes still being traders’ hands for September laycan, so prices have inevitably dropped. In the middle of the week, a bid for 40,000 mt of mid-volatile PHCC was at $183/mt FOB, but by Friday most buyers have been targeting below $180/mt FOB.
Also, re-export offers by steel mills in Asia have persisted. In particular, a mill in the Far East offered 75,000 mt of low-volatile PHCC at $180/mt FOB for October laycan.
“I do not believe that Indian demand will improve soon to help prices,” a trader said.
The SteelOrbis reference price for ex-Australia PHCC has lost $13/mt compared to the previous day, September 5, falling to $182/mt FOB.
The bearish sentiment in China has been another important negative factor. The tradable level for PHCC in the import market in China has lost $12.5/mt over the past week, coming to $195-200/mt CFR. “Steel demand is unlikely to rebound in September and so all raw materials will have to go down,” one source commented.
