Prices for ex-Australia coking coal are expected to stay at high levels after a jump in a deal done yesterday at far above $300/mt FOB. Tight supply compared to higher demand is the main reason for the soaring prices and strong expectations.
A deal for 40,000 mt of mid-volatile Goonyella C premium hard coking coal (PHCC) was closed at $321/mt FOB for October 21-30 laycan. This is up by $39.5/mt from the previous reference price of $281.5/mt FOB. Though the jump by almost $40/mt has been assessed as too high, market sources believe prices will stay at high levels above $300/mt FOB for some time as “supply is really tight for PMV [premium mid-volatile material], while India’s appetite is only rising,” a trader said.
Some sources believe that the real market level is close to $310/mt FOB, “which is pretty high already. Indian mills will buy steadily at this level”.
At the same time, in China the tradable level for PHCC from Australia is at $260-265/mt CFR only, up just slightly by $10/mt over the past week. This means that ex-Australia coking coal will remain out of the range of interest of Chinese buyers. Ex-Russia PCI has been offered at $160-165/mt CFR to China.