With customers remaining on the sidelines, Australian coking coal suppliers have continued to cut their target prices to secure orders. So far the lower offers appear to have just encouraged steelmakers to wait further, thus exerting more negative pressure on prices.
In particular, today, June 9, an Australia-based supplier floated an offer for 80,000 mt premium mid-volatility coking coal (HCCA), for June 25-July 4, at $375/mt FOB, but failed to find a buyer. This represents a $15/mt decrease in the offer price within one day. Meanwhile, customers are said to be seeking to pay levels not higher than $340s/mt FOB Australia.
Given that overall sentiments towards future developments have remained bearish due to the ongoing weak demand for finished steel worldwide, some suppliers are searching for ways to secure themselves from a further decrease in prices. "There is no spot now but the discussions started for the term business now. Some PCI [pulverized coal injection] suppliers believe that 90 percent of PLV [premium low volatility coal] price is reasonable, but the buyers say 75 percent,” a major Asia-based market source commented.