The mood in the Australian coking coal market has not improved much this week even despite one deal done at the higher level of $230/mt FOB and some talk about a possible supply reduction due to a workers’ strike at one Australian mine. However, taking into account strong competition with ex-US premium coking coal suppliers, and the lack of strong demand in general, the upward mood in the Australian market would have fundamental support, as SteelOrbis learned from the market on June 16.
Early this week, a deal for 75,000 mt of ex-Australia low-volatile German Creek premium hard coking coal (PHCC) was done at $219.5/mt FOB with the buyer heard to be ArcelorMittal.
But late on Wednesday, another trade by other major Australian miner was reported at $230.2/mt FOB for 75,000 mt of mid-volatile RVC/GYCC/CVC PHCC for laycan during July 16-25. It was purchased by a trading company, according to sources. “I don't agree with the price. I think it's still $220-225/mt FOB. It's a position cargo of a trader. We will see it offered at a higher level to push the market soon. But end-users have not accepted this price,” a Singapore-based trader said.
In the middle of this week, the proposed workers’ strike at one of the major coking coal mines of BHP Billiton/Mitsubishi Alliance - the Saraji coal mine - has been widely discussed this week, but it has not happened by the end of the week, with concerns over a possible drop in supply easing.
A few smaller Indian mills have purchased low-volatile and mid-volatile PHCC from the US at $220-225/mt CFR, which translates to below $210/mt FOB for ex-Australia material. Though large Indian mills are still stuck as they need some special high-quality coal from Australia which could not be substituted, the material from the US is also good quality and can be used by steel mills.
The SteelOrbis reference price for ex-Australia PHCC has settled at $225/mt FOB, taking into account both deals done this week and that there are offers from Australia at $227-228/mt FOB, while bids are hardly above $220/mt FOB. The reference price is down by $1/mt from last week.