A deal for 75,000 mt of Branded mid-volatile premium hard coking coal (PHCC) was done at $185/mt FOB last Friday, signaling a significant rise compared to the previous transaction for mid-volatile material at $176.6/mt FOB. The majority of market sources believe that the rise has been rather rapid amid ongoing weak demand conditions, with only Indian buyers showing some interest in purchases. But supply concerns have finally started to play a bigger role.
Two major Australian mines have been halted in April after accidents. Operations at Anglo American's Moranbah North underground coking coal mine in Queensland have been stopped for two weeks already after a fire incident on March 31. Market sources believe that the mine will be not in operation for up to one more week. The mine’s capacity is 7 million mt of coking coal per year. Another Australian mine - Appin mine - with a production capability of 10.5 million mt per year has been also halted after an accident on April 9.
In addition, heavy rains have blocked work on the main rail line connecting Australian thermal and semi-soft coking coal mines in the Hunter valley region to the key port of Newcastle.
Market sources believe that Indian buyers will insist on prices not above $185-190/mt FOB in the near future, aiming to buy more North American coal, preventing Australian prices from recording further rises.