Prices for ex-Australia premium hard coking coal (PHCC) have declined further this week as supply has remained high and demand, especially from India, has been reduced. However, considering that a sharp decrease has already been seen in prices and also the possible resumption of sales to China, market sources believe that the downtrend will come to a halt or at least slow down for some time.
A deal for 60,000 mt of ex-Australia Illawarra mid-vol PHCC has been done at $212.5/mt FOB for August laycan, down by $5/mt from the previous deal done at $217.5/mt FOB early this week. The material was sold to a trader. Bids for mid-volatile material for early September laycan were at $204/mt FOB and $200/mt FOB on GlobalCoal in the middle of the week. Market sources said that the main reason for the further decline was ample supply, while for end-of-September shipment suppliers may try to resist and voice slightly higher levels.
For the Indian market, the latest tradable level has been reported at $225/mt CFR, which translates to around $210/mt on FOB basis, but “bids are rare, in general buyers are staying away,” a trader said.
In the Chinese market, the reference import price for PHCC has settled at $230/mt CFR, down by $5/mt over the past week. In this situation, the recent FOB prices from Australia could be attractive for buyers in China and may replace some North American volumes. However, the negative margins of Chinese mills (some market sources said that losses have reached RMB 200/mt for basic long steel sales) and more maintenance works being announced for August are preventing demand from recording any significant improvement for now.