Prices for ex-Australia premium hard coking coal (PHCC) have increased this week, as confirmed in a few deals in the spot market. Though overall demand from Indian and Chinese end-users is far from strong, traders have continued to accept higher levels and expectations for further developments in Asia have been better, which has allowed spot prices to rise above $230/mt FOB this week. Nevertheless, bids from end-users are still closer to $220/mt FOB.
A deal for 75,000 mt of mid-volatile Goonyella C/Caval Ridge PHCC has been reported at $237/mt FOB for late August shipment. The deal seems to have been done to a trader. Other smaller tonnages of 35,000 mt and 40,000 mt also of mid-volatile PHCC were rumored to have been traded a little earlier at $235/mt FOB and $230/mt FOB, though they have not been confirmed by the time of publication.
The tradable level for PHCC in China has increased to $240/mt CFR, from $225/mt CFR a week ago. “We expect some demand for Australian cargoes coming from China, this is helping sentiments now, and traders are hopeful,” a market source said.
“Demand for finished goods is weaker. Tractor and commercial vehicle production plans have fallen by 50-60 percent. Also, there has been a negative effect due to heavy rains and floods in the northern part of the country,” a source from India said, adding that for Australian PHCC bids are hardly above $235/mt CFR now. Nevertheless, taking into account that the situation in India will improve in September, some mills may be interested in purchases in the coming weeks and will have to accept higher prices.
The SteelOrbis daily reference price for ex-Australia PHCC has settled at $236/mt FOB by the end of the week, up by $7/mt.