Some improvements in sentiments in China and higher bids have pushed ex-Australia premium hard coking coal (PHCC) prices up slightly. However, the uptrend still seems very shaky as end-user demand is not so supportive and the main driver is traders’ speculative desire to push prices up, SteelOrbis has learned from the market on June 20.
A bid for mid-volatile PHCC from Australia has been reported at $228/mt FOB on Monday for July laycan, while last week most firm bids at GlobalCoal were not above $200/mt FOB. Also, a few traders have been saying there could be demand at “close to $230/mt FOB”. “But end-users do not accept the $230/mt FOB level… Traders are trying to create the illusion the market is supported,” a Singapore-based trader said. Most offers have been heard at $240/mt FOB for low-volatile material.
At the same time, in China, offers for ex-Australia PHCC have been reported at $240/mt CFR or above, with the tradable level said to be “at least $20/mt lower still,” a source said. Previous deals and offers for PHCC from the US to China have been reported at up to $225/mt CFR. The stimuli measures by the Chinese government and the recent increase in local coking coal prices by RMB 100/mt ($14/mt) late last week have provided support for the general market sentiments, though demand is still inactive as local prices are still at least $10-20/mt more attractive than import prices.
Indian coking coal importers have been inactive recently with the monsoon season starting and demand fading away. The tradable level has been heard at $240/mt CFR for PHCC from Australia, translating to around $225-227/mt FOB.
The SteelOrbis daily reference price for ex-Australia premium hard coking coal has increased by $3/mt to $228/mt FOB amid higher bids from traders.