Prices for ex-Australia premium hard coking coal (PHCC) have reached a new high in the last deal done on Monday and suppliers are targeting further increases, though market sources believe that the room for further hikes is limited, at least for the near future.
A deal for 45,000 mt of mid-volatile PHCC Riverside was signed at $255.2/mt FOB for September laycan. The material is for the Indian market, according to sources. This is up from direct deals reported for PHCC late last week at $250/mt FOB and up from the previous sale of low-volatile coal at $246.5/mt FOB early last week. “Indian buyers need to restock for the post-monsoon season and availability of mid-vol material is not big,” a source commented.
Nevertheless, though there are expectations for hikes in local flat steel prices in India in September, for now demand for finished steel has been moderate and mills have already faced rising costs, so “I believe $260/mt FOB will be the ceiling,” another source said.
In China, the situation has been not so promising as last week steel mills did not accept the fifth coke price increase in the domestic market and the tradable level has slipped from $250-255/mt CFR to $245-250/mt CFR for PHCC, and mainly ex-US material could be traded at such levels. Though today futures prices for steel and raw material have rebounded a little in China, the fundamentals are still weak amid a worsening real estate market.