Coking coal spot market bounces on new higher deals Back to News

Some signs of optimism returned to the Asian spot coking coal market Monday, as two trades of Australian spot cargoes into China were reported at higher prices.

Platts increased its Australian export price by $4/mt to $205/mt FOB HayPoint, while the Chinese import price gained $6/mt to $208/mt CFR Qingdao.

 Two cargoes of Australian origin high CSR hard coking coal were sold Friday and Monday at above $240/mt CFR China, to separate steel mills, according to sources.

 In subsequent market testing by Platts of the data, participants expressed some surprise at the price level achieved. They reasoned, however, that buyers could still be willing to pay more for the very highest quality coal, because of its scarcity both in China and on the seaborne market outside of longer term contracts, and because of its blending properties.

 Additionally, several sources speculated that this might actually be "contact tonnage," whereby the buyer might have chosen to pay above market value in order to help maintain future supply from the producer. Such behavior was seen as common by traders and buyers surveyed. Accordingly, the price of the transactions was not fully reflected in the Platts assessment.

 In India, a coke producer was heartened by the news of higher-priced Chinese coking coal import deals, saying of the recent decline in coking coal prices: "I think the worst is behind us."

A lack of demand for pig iron was reported to have led to inventory build-up and a softening in pig iron prices down to Rupee 20,000-21,000/mt, according to one trader. Low-ash metallurgical coke, meanwhile, was heard offered between Rupee 18,000-19,000/mt ex-plant by private producers on the east coast of India. Price expectations of Indian coking coal buyers had dropped significantly in the last week or two.

Colombian mid-vol coking coal was heard offered to a trader at $225/mt CFR India for a 60,000 mt lot, while another trader commented that he was still hoping to sell such material as high as $255/mt CFR.

Elsewhere, US-origin mid-vol blend was heard offered into Asia at $190-195/mt FOB and lo-vol in the $160's, traders said.

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