A major Australian miner has concluded a deal for 75,000 mt of mid-volatile Goonyella premium hard coking coal (PHCC) at $197.1/mt FOB for end of September-early October laycan, while the previous deal for a similar grade was done at $188.82/mt FOB in early August. The market mood has been supported by the further rises seen in the local Chinese market early this week, reflecting news of coking coal production restrictions. The Chinese authorities have started inspections of coal mines in eight major provinces to check if raw coal production in 2024 exceeded mines’ capacities and if monthly outputs in the first half of 2025 exceed 10 percent of the announced annual capacity. In addition, a number of small mines have already started to halt operations due to safety reasons.
Moreover, transportation of coal from Mongolia to China is still limited and is unlikely to improve in the near future, boosting interest among Chinese buyers in coking coal of other origins.
Though the current tradable import PHCC prices in China are still lagging behind offers from Australia, an increased number of inquiries has been reported from China for end-of-September shipment. The workable price level for PHCC in China has reached $185-190/mt CFR this week, versus $180/mt CFR last week. However, some of the recent hikes in the local coking coal market have been triggered by the sharp rise in futures and some speculative demand. As usual after gains early in the week, coking coal futures at Dalian Commodity Exchange have softened by 6.2 percent today, August 14, but are still higher week on week.
Another reason for the continued increase in ex-Australia coking coal prices is the expected rebound in demand from Indian buyers. One trader said that, even though Indian mills are cautious now, they are planning to boost production in October and need raw materials for “the expected better fourth quarter for steel sales”.