Prices for ex-Australia premium hard coking coal (PHCC) have fluctuated in a limited range this week before declining on Friday, settling at below $325/mt FOB, though the impact from the new cyclone Kirrily, which led to the closure of two major coal ports in Queensland state this week amid heavy rainfall, is yet to be seen fully.
On Friday, market sources have been waiting for the results of the tender which made one of the main steel producers ArcelorMittal sell 78,000 mt of low-volatile PHCC from Australia for February 21-March 1 laycan. Though the final result has not been confirmed by the time of publication, a few sources confirmed that the highest bid was at $316/mt FOB. “They won’t sell lower, but I don’t think that the market in general is so bad,” an Asian trader said. Also, one of the reasons for the lower deal price is due to less demand for low-volatile materials and lower bids among Chinese and Japanese customers, who are the main buyers of this grade.
Early this week, a deal for 40,000 mt of mid-volatile Illawara PHCC was done at $326/mt FOB for February 18-27 laycan. Also, another sale of 30,000 mt of mid-volatile Caval Ridge was sold at $350/mt CFR to an Indian end-user with the option to be replaced by Goonyella or Illawara at $355/mt CFR. Market sources have assessed the FOB level in this deal at “definitely below $330/mt FOB.” Nevertheless, at least two bids have been seen at the GlobalCoal platform at $330/mt FOB and $335/mt FOB during the week for 40,000 mt cargoes of mid-volatile materials with February and early March laycan.
Two major Australian coking coal terminals Abbot Point and Hay Point have been fully shut down since January 23 as a precautionary measure and they are expected to resume work this weekend. Major miners like Anglo American, BHP Mitsubishi Alliance, Bowen Coking Coal and Peabody Energy use these ports for exports. Some sources said that this will definitely impact the market but “people need time to realize the impact: how the mines are, transportation chains, delays in shipments, many factors,” a source said.
The SteelOrbis daily price reference for Australian PHCC has declined by $10/mt from yesterday to $323/mt FOB.
As for the tradable level for import PHCC in China, it has been fluctuating in the limited range of $325-330/mt CFR, versus $325/mt CFR last week.
One deal for ex-Russia PCI has been signed to China at $142/mt CFR, down by $5/mt over the past week. However, the latest offers and sales to Malaysia of ex-Russia PCI have been at $150-154/mt CFR, while offers to India are still at $160-165/mt CFR.
