Prices for ex-Australia premium hard coking coal (PHCC) have continued to increase on Monday, June 5, as confirmed in the latest deal to India. Suppliers will try to push prices to $240/mt FOB as they have already passed the $230/mt FOB mark, but the success of this will depend strongly on India’s demand, as no improvement has been seen in China despite the latest rebound in futures and steel spot prices.
A contract for 50,000 mt of mid-volatile PHCC Goonyella C has been signed to an end-user in India at $246/mt CFR for June 11-20 laycan. This price translates to around $230-231/mt on FOB basis, taking into account freight for a Supermax vessel. However, some sources said that the price on FOB basis could be even higher, at $233/mt FOB or above, if the lot is shipped with some other volume in a Panamax vessel.
As reported last week, a deal for mid-volatile PHCC Illawarra was done at $228/mt FOB on May 31, which at the time was assessed as overpriced.
The SteelOrbis daily reference price for ex-Australia PHCC has settled at $231/mt FOB on June 5, up by $7/mt. “Prices reached $230/mt FOB and we see demand from India, but sentiments are not that positive as China is far behind [in terms of bids for import coking coal],” a trader said.
The latest offers for mid-volatile PHCC have been all reported at not below $240/mt FOB. Market sources believe that this level could be achieved in some time, but going above it could be harder.
The tradable price level for premium hard coking coal in China has been assessed at $220-225/mt CFR at the highest, translating to around $210/mt FOB Australia. In these conditions, if there is need, buyers from China may choose ex-US sourcing or still cheap Russian coal.