Coking coal firms on optimism
Australian fob coking coal markets have been quiet but prices have remained at elevated levels on optimism around Chinese demand and higher global steel prices. Buyers remain less certain about price increases however.
Kallanish assessed premium hard coking coal at $331.94/tonne fob Australia, up $2.41/t from $329.53/t the previous week.
Actual spot trading activity was very limited as China was on its Spring Festival holiday all last week. India also had its National Day holiday last week. There was however a deal for 40,000 tonnes of Saraji to India at $332/tonne fob Australia, with a laycan in 1-10 march, according to a market source.
In China, steel output is expected to remain firm if steel demand recovers, but when this will actually happen is uncertain due to Covid infections. Domestic mills are reportedly still attempting to force down local coke prices in order to protect their margins, and coke producers are limiting output due to negative margins.
Outside of China, a global recovery in steel prices has supported expectations for firm coking coal prices. The possibility of further macroeconomic woes in key markets means steelmakers are more cautious, however. Global crude steel production remains subdued.
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