Global coking coal prices remain relatively stable in December

According to S&P Global, coking coal quotations in Australia (FOB Australia) for the week of December 1-8, 2023, increased by 2.5% compared to the previous week – to $335.25/t. But in general, from November to December, this figure fell by 4.2%.

As of December 8, 2023, coking coal in China (CFR China) was offered at $330/t – raw material quotations have not changed since the beginning of this month. On November 1, the price was $283/t, meaning that over the month to December 1, coking coal prices in China increased by 16.6%.

At the end of last week, the Asian coking coal market remained stable as trading activity was low due to the cyclone off the coast of Queensland.

The market believed that the current price levels reflected a supply shortage in Australia. Some traders, according to S&P Global, observed demand from end users, including India, but this did not lead to transactions due to unfavorable prices. Despite the existing needs, Indian consumers expressed their preference for cheaper US high-quality coking coal amid the weakness of the local steel market.

On the Chinese CFR market, premium coal prices have remained stable since early December. Although the domestic supply of this raw material was limited, the local market is not ready to pay higher prices for sea transportation. Most buyers in China took a cautious stance last week, awaiting the outcome of negotiations on another coke price increase and the impact of the reopening of Shanxi mines.

According to CoalMint, coke producers and steel mills in China are currently engaged in a dialogue on the third round of coke price increases of 100-110 yuan/t. Steelmakers are expected to accept the offer as they will have to replenish their stocks. Coke producers continue to cut production by 20-30% to reduce losses.

Coke prices in China have risen twice already, driven by active purchases by steel mills, limited supply and a steady rise in coking coal prices. At the same time, the prospects for higher steel prices are currently limited, as demand generally declines during the winter period.

As of December 11, coking coal prices (FOB Australia and CFR China) remained at $335.25/t and $330/t, respectively. According to the market, the impetus for the price increase may be a problem with shipments under contracts from Australia, which will force buyers to look for raw materials at spot prices, as well as logistical problems within China. However, for now, the quotes have lost their upward momentum.

As GMK Center reported earlier, global coking coal prices continued to rise in October, with the price trend changing due to an increase in supply.