Prices for ex-Australia premium hard coking coal (PHCC) have declined gradually this week, based mainly on still bearish expectations and low bids rather than real transactions. Weak demand in India and China has put big pressure on the market, where supply has still been stable at high levels. However, most market sources believe that fresh buying from Indian mills in the near future will help prices to settle and stabilize in the short term, SteelOrbis learned from the market on May 26.
Offers for premium low-volatile and high-volatile Australian hard coking coal have been at $220-240/mt FOB depending on the brand of coal and laycan, though “anything above $220/mt FOB is not serious,” a trader said. At the same time, this week a few bids for mid-volatile premium hard coking coal have been at $191/mt FOB and $194/mt FOB at GlobalCoal for early July and late June laycans respectively. Bids have declined slightly from $194-199/mt FOB for mid-volatile PHCC and $200-201/mt FOB for low-volatile PHCC last week.
There has been chatter in the market that one Indian mill has been in negotiations with an Australian seller at “slightly below $220/mt FOB,” but the signing of a deal has not been confirmed by the time of publication.
The SteelOrbis reference price for ex-Australia PHCC has settled at $215/mt FOB on Friday, down by $7/mt since late last week.
Market sources believe that prices for ex-Australian PHCC may stabilize once trading to India resumes, though in general negative expectations still prevail with most market sources expecting FOB prices to come to $200-210/mt FOB in June. “Most Australian miners’ view is it's going to be painful below $200/mt FOB, but let’s see how it goes when supply exceeds demand,” a Singapore-based trader said.
The reference price for PHCC in China has indicatively slipped further to $210-215/mt CFR. No deals are expected for premium coal in the near future as bids are below $200/mt CFR for low-volatile PHCC. An offer for ex-US low-volatile PHCC has been reported at $230-535/mt CFR this week, being out of the range of interest of buyers, who prefer, if needed, to replenish stocks with cheaper Russian material. A deal for ex-Russia K4 coal was reported at $155/mt CFR China early this week and by Friday market sources said that $150/mt CFR would be “a fair price for Russian hard coking coal,” a source said.