Coking coal

During the period of February 1-8, quotations decreased by 2.3%, and since the beginning of the year – by 5.2%

Coking coal prices in Australia have been declining since the beginning of the year. In particular, according to S&P Global, during February 1-8, 2024, raw material prices decreased by 2.3% compared to the previous week – to $315.5/t FOB, and by 5.2% since the beginning of the year.

In late 2023 and early January 2024, coking coal prices in Australia rose as the market saw increased demand for Australian raw materials due to problems in the Red Sea that delayed the supply of raw materials from the United States. At the same time, Australian mining companies were uncertain about possible supply volumes in January and February.

Active trading amid a shortage of raw materials continued until December 11. Consumers replenished emergency stocks and suspended purchases. Mining companies, in turn, emphasized that Queensland’s ports were overloaded, and that tensions in the Red Sea, additional demand from India and Southeast Asia as a result of longer delivery times for raw materials from the US, would keep prices high for premium coking coal.

In the second half of January, raw material prices did decline due to lower demand and market weakness. Some plants replenished their stocks with surplus and took a wait-and-see attitude. At the same time, the market did not expect a significant drop in prices by the end of the month, as a tropical cyclone was approaching the Queensland coast and the coal mining region.

Overall, in January, raw material prices dropped by about $10/t, from $332/t to $323/t FOB. At the end of the month, the global supply of raw materials improved and the supply of Australian coal increased, which limited trade in the market and forced local producers to reduce prices. By February 8, they had dropped to $315.5/t FOB. However, demand remained low, especially in Indonesia and China, as consumers’ needs and stocks were largely met by March. Only Indian importers have low current stocks.

Despite improving global supply, Australian mining companies are still facing various production and logistical challenges. Even in this environment, prices are under pressure and most end users expect further falls before considering resuming purchases.

On the Chinese market, coking coal prices also declined in January and early February. As of February 8, the raw material price was $320 per tonne CFR, down 1.2% from the previous week. And since the beginning of the year, they have fallen by 2.4%.

At the end of 2023 and in the first decade of January, prices were relatively high at $328-335/t, as demand from local steelmakers was high before the Chinese New Year holidays. From the second decade of January until February 8, prices were mostly stable and slightly declined at the end of the period amid low trading activity as the country moved away for the New Year holidays.

As GMK Center reported earlier, in early December 2023, global coking coal prices remained relatively stable. In Australia, they amounted to $335.25/t FOB. At the same time, this figure fell by 4.2% from November to December.