News Room - Steel Industry

Posted on 09 Sep 2024

Coking coal plunges on weak demand, oversupply

Australian fob coking coal slumped during the week ended 6 September as weak demand and oversupply added pressure on the market.

Kallanish assessed premium hard coking coal at $177.93/tonne fob Australia, plunging $27.2/t from $205.13/t fob the previous week.

On the Singapore Exchange, Premium Coking Coal Futures for September settled at $177/t fob on Friday, tumbling $24/t from $201/t fob a week earlier.

According to a Singapore-based trader, an offer was heard on Thursday at $188/t for 73,000 tonnes of Australian Premium Mid-Vol Illawarra for 20-29 September laycan from a Chinese trader.

Citing globalCOAL, another Singapore-based trader reveals a bid was heard on Thursday at $180/t for 40,000t of Goonyella for 21-30 October laycan. Meanwhile, an offer was heard on the same day at $186/t for 73,000t of HCCA branded coal for 20-29 September laycan.

“The prices are being driven by weakness in Chinese steel markets which is then flowing into the coking coal market as well,” a Singapore-based trader says. According to him, the Dalian Commodity Exchange’s steel and coking coal contracts, which were being heavily sold during the week, impacted sentiment in global markets.

“The spot market globally is oversupplied. This is not expected to change in the short term,” he adds. Amid falling prices and plenty of availability, he also notes no one is in a hurry to buy.

Another Singapore-based trader is also bearish on the short-term outlook for coking coal. “Rebar and hot rolled coil prices fell during the week. Demand for hard coking coal is still weak,” he says.

He also notes that more supply will add downward pressure on coking coal prices. Amid the downturn, he says the market could see some mills reselling their cargoes again.

He also notes the monsoon season in India is dragging on longer than expected. “We are waiting/watching India to come back and drive back the demand and give some support to at least stop this downturn,” he adds.

A China-based steel mill also foresees coking coal prices continuing to fall. “There is no demand in the market. Many cargoes have nowhere to sell,” he adds. He also notes that China’s market remains weak, with its futures market collapsing during the week (see separate story).

Source:Kallanish