Coking coal

Quotations of coking coal for the week of November 28 – December 5 in Australia increased by 1.2%, and in China – remained at the same level

Quotation of coking coal in Australia (FOB Australia), according to S&P Global, for the week of November 28 – December 5, 2022, increased by 1.2%, or by $3/t compared to the previous week – to $250/t.

Quotations of coking coal in the Australian market increased slightly because of limited supply of raw materials due to adverse weather conditions. At the same time, demand from India, Indonesia and Turkiye remained at a high level.

In addition, coking coal prices are supported by growing demand for steel. Steel plants are replenishing stocks of raw materials against the background of rising prices for steel products. Signs of stabilization of the market for finished products improve the confidence of producers.

According to ArgusMedia, recovering demand, weather conditions in Australia and a strong recovery in global steel consumption are likely to support coking coal prices in the Asia-Pacific region in the coming weeks after falling in November.

Australian coking coal prices have fallen by more than $64/t since the beginning of last month. The decrease in prices was caused by a reduction in production by steel plants due to low margins.

In the first quarter of 2023, stable prices for coking coal are expected – about $250/t. This level will be supported by demand in India, while demand for coking coal in the EU market is weak due to reduced steel production.

In the Chinese market (CFR China) coking coal prices were stable last week. As of November 11, 2022, coking coal quotations were $299/t, which corresponds to last week’s price level.

Sentiments in the Chinese market are elevated against the background of news about the easing of quarantine restrictions. However, buyers remain indifferent to imported raw materials with long delivery times. Steelmakers do not yet have confidence that the authorities will not introduce total restrictions in the near future, so they do not risk buying coking coal with long-term delivery.

Most of China’s steel mills are still low on coking coal stocks, so the uncertainty over imported raw materials could mean they have to buy coal at higher prices in the near future to keep up production.

As GMK Center reported earlier, according to Fitch’s forecast, coking coal prices are expected to reach $200/t and $140/t in 2023 and 2024, respectively.