The seaborne coking coal market was unchanged Wednesday as several Chinese market participants gave indicative bids at current levels. Platts assessed both premium low-vol and mid-vol hard coking coal with 64% CSR (coke strength after reaction) unchanged at $140.50/mt FOB and $124/mt FOB Australia respectively. Purchasing managers at two large Chinese mills said prices for Australian premium material were exhibiting some signs of stability. One said high production costs would stop prices from dropping any further, although he added that prices have “no chance” of rebounding as the Chinese steel market remains fragile. Conversely, a Chinese trader said prices could pick up if there is a sustained rebound in billet and iron ore prices. Continued industrial action at BHP Billiton Mitsubishi Alliance’s Australian mines could also bolster the market, he added. A mining source said supply might also tighten because “almost all the Australian miners have started to cut production.
” Another purchasing manager with a Chinese mill said he would be satisfied if Australian 70-74% CSR low-vol premium HCC can be purchased at $154-155/mt CFR China, since import prices were already below domestic coals. He “could not guarantee” his company would decide to purchase now anyway, he said. However, not all sources agreed that the market had bottomed. One trading source said there was no true demand for Chinese billet, despite recent increases. He pegged Australian premium low-vol below $150/mt CFR China. Another mining source agreed Chinese demand was weak, citing an indicative bid last week at $135/mt CFR China for Australian HCC. Outside of China indicative bids were pegged at slightly higher levels, but it was unclear whether these were serious or repeatable. In northeast Asia two mills sources said they would bidfor top tier prime hard Australian coals in the $150s/mt FOB. One said $156/mt FOB was a number he could consider, while the other said a figure just above $150/mt FOB would be “good.” Neither of the mills had immediate need for spot tonnage as they were contract buyers, however.
Source:platts report