Prices for ex-Australia premium hard coking coal (PHCC) have improved slightly further this week, following a number of deals, signaling that buyers are finishing restocking. Though supply concerns have eased after two major mines recommenced production after a long halt since the start of the month, another mine has announced a stoppage.
Early this week, a deal for 40,000 mt of Goonyella mid-volatile PHCC was done at $191/mt FOB, up by $2/mt from the level seen late last week. Another contract for 75,000 mt of the same quality material was done by a major miner at $192.2/mt FOB in the middle of the week. Also, a contract by a trader for mid-volatile material was signed at $209/mt CFR India later this week, which translates to around $193/mt FOB, according to market sources.
Two major Australian mines (Moranbah North and Appin mines with a total capacity of 17.5 million mt of coking coal per year) have restarted operations this week after accidents in early April. Nevertheless, Glencore's Oaky Creek coal mine suspended operations on April 24 after an accident of inflow of water. According to market sources, while the stoppage is for a short period - not longer than 10 days - the market will lose from 100,000 mt to 150,000 mt of coking coal from the mine. In the worse scenario of a stoppage of one month, the losses may increase to 300,000 mt.
In general, market sources said that restart of the two mines which were stopped for three weeks signals an easing of the supply situation, but the new accident has added pressure and, even if demand eases in the near future, prices may be supported at the current levels, according to sources.
Also, some positive signals are coming from China, with Chinese coke plants trying to implement a second round of local price increases with a rise of RMB 50/mt.