Better demand from Chinese buyers and some SE Asian mills have supported ex-Australia premium hard coking coal (PHCC) further. But since prices have almost reached $195/mt FOB, which were last seen months ago, and overall supply volumes have been sufficient, the prices may be near the ceiling at least for the near future.
Two contracts for 160,000 mt in total of low-volatile Saraji PHCC were signed at $194.2/mt FOB for late November-early December laycan late last week. This is up from the previous deal at $193.5/mt FOB, but done for mid-volatile material, usually supplied to India. Demand from China and some SE Asian countries visibly improved last week and the tradable level for PHCC in China reached $202-205/mt CFR versus $200/mt CFR reported earlier. “Second round of coke [price] increase is implemented, local coal is in demand and supply is less, so there is no surprise in rise [for ex-Australia PHCC],” a trader said.
However, the recently implemented steel production cuts in Hebei province from one side gradually support steel prices, but will also reduce raw materials consumption. Major cities in Hebei province - Shijiazhuang, Tangshan, Langfang, Hengshui, Handan, Xingtai, Baoding, and Cangzhou – started its steel production and transportation restrictions due to a level II emergency response to alleviate pollution, under which sintering restrictions will be 30 percent.
In India, demand for coking coal has been stably low recently and bids are still lagging behind, being not above $205/mt CFR.
