Prices for ex-Australia coking coal have posted signs of an improvement today, June 1, after a relatively slow first half of the week. A new deal done at significantly above $220/mt FOB has boosted the market mood, though many customers are still resisting higher prices.
A deal for 60,000 mt of ex-Australia mid-volatile Illawarra premium hard coking coal was done by an international trader at $228/mt FOB on May 31 for late June laycan, while the material will be shipped together with 15,000 mt of the same grade material with the price being index-based. The price in this contract has been assessed as being high, since all bids were much lower earlier this week (at $194-198/mt FOB), and such a higher price could be “due to a special agreement between the seller and buyer,” a Singapore-based trader said, adding that the real price level in the market should now be at $222-225/mt FOB for June laycan. “In theory, China will be able to pay $200/mt FOB in the future, and India up to $250/mt FOB, but we need to see how it will develop in terms of buying,” a source said.
The SteelOrbis daily reference price for premium hard coking coal from Australia has settled at $224/mt FOB on June 1, up by $9/mt. Earlier this week, an offer for 30,000 mt of low-volatile PHCC (premium hard coking coal) from Australia was at $240/mt FOB for July laycan, too high for buyers, but signaling that suppliers were trying to push prices up. Also, mid-volatility PHCC has been on offer to India at $230/mt FOB on Thursday, June 1.
China’s import coking coal market has remained muted, though prices have also rebounded indicatively. The reference price for low-volatile PHCC in China has increased to $222-225/mt CFR, up from $210-215/mt CFR last week. Australian offers have not been workable. One deal for ex-Russia K10 hard coking coal was done at $155/mt CFR early this week, similar to a sale of lower quality K4 last week. “There are rumors that one of the Russian miners has its mines submerged in water,” a market source said, explaining the expected increase in prices.