Prices for ex-Australia premium hard coking coal (PHCC) have continued to increase this week, but this week the confidence in the sustainability of the trend increased after more deals done for to China.
A deal for 80,000 mt of low-volatile Peak Downs PHCC was signed at $196.2/mt FOB for December laycan this week, which is up by $2/mt from the previous contracts made late last week. Though there has been no confirmation about the sales destination as the cargo was purchased by a trader, market sources agree that this week the market has been strongly supported by China and traders may be interested in taking positions.
“Now I can’t exclude the possibility that the market will reach $200/mt FOB,” a trader said. Coking coal futures at Singapore Exchange have reached $200/mt for November contracts and $206/mt for December contracts by the end of this week, also signaling about the stronger market conditions.
At least three deals for both mid- and low-volatile PHCC from Australia have been done by traders for prompt shipment (late October-early November) at $211/mt CFR, which is visibly higher than $202-205/mt CFR seen as a tradable level last week. Some negotiations earlier this week were heard at $208-210/mt CFR, but prices finished the week at a higher level, even though by the end of the week steel futures were going down. Market sources said that the supply of coking coal in the domestic market in China was still limited due to inspections at mines, lower transportation from Mongolia, while coke prices in China are going to keep increasing.
