Australian premium coking coal FoB price edges lower on thin trading

Australian premium low-volatile (PLV) hard coking coal (HCC) FoB price decreased marginally this week, with a deal concluded at a lower level, and amid lower-priced offers available for ex-Chinese spot buyers.

Trading activity has slowed down as buyers turned cautious amid uncertainty over near-term prices following a series of higher-priced deals concluded during the latter half of last month.

In January, Australian PLV HCC price had soared to a 10-month high of over $160/t FoB at month-end, the highest level since Mar'20.

Rising restocking demand and buyers’ concerns over potential supply disruptions during Australia’s cyclone season were key factors behind the recent rally in prices. Competitively priced Australian cargoes relative to Atlantic coals of similar grades was also supporting prices thereof.

Nevertheless, China-based end-users and traders have been actively seeking reselling opportunities since prices recovered after hitting rock bottom in January. This has, in turn, increased the spot availability of cheaper seaborne coking coal cargoes for Asian buyers outside of China.

The Indian market is presently observing a steady resurgence in restocking demand for coking coal on the back of strong demand for steel and healthy production levels, coupled with a buoyant metallurgical coke market.

India Coking Coal Import Shipment Vessel Lineup

CoalMint's latest vessel lineup data (as on 1 Feb’21) reveals that a total quantity of 1,801,417 t of Australian coking coal is expected to reach various Indian ports by 16th Feb’21.

344,000 t Dhamra (Odisha)

125,850 t Gangavaram (Visakhapatnam)

174,000 t Haldia (West Bengal)

233,417 t Jaigarh (Maharashtra)

278,827 t at Krishnapatnam (Andhra Pradesh)

132,000 t at Mormugao (Goa)

243,500 t Paradip (Odisha)

222,815 t Vizag (Andhra Pradesh)

Price Assessments

Latest prices for the Premium HCC and the 64 Mid Vol HCC grades are assessed at around $155.00/t and $138.50/t FOB Hay Point, Australia.

For Indian buyers, these prices amount to $169.10/t and $152.60/t respectively on CNF India basis.

Australia-India dry bulk freight rate is currently assessed at $14.10/t for delivery by Panamax vessel class.

Outlook

Presently, there remains a lack of clarity on future price direction owing to limited offers from Australian producers.

Besides, there is limited upside potential for spot prices of Australian premium coking coal due to the ongoing influx of lower-priced resale cargoes from China in the ex-Chinese market.

However, the ex-China market continued to see firm bids for premium coking coal, while near-term price expectation remained steady due to lack of indication on direction.

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By Aditya Sinha