Coal news and updates

Coking coal, met coke prices may slide further

March 18: Prices of coking coal and metallurgical coke are expected to slide further from the current levels because of expected low demand from user industries, at least till the end of the general elections in May, traders contacted by ICMW said on March 18.

"The market is likely to remain subdued at least till the elections. Negative sentiment is prevailing all around and the industry is avoiding fresh commitments as it awaits the formation of a new government at the Centre," they said.

"Though Indian demand generally does not affect international prices too much, this time around, with demand from other countries, including China, not being buoyant, a lower-than-expected demand from India is causing softness in international markets," one trader said.

Coking coal prices have fallen by nearly 14% from a high of $124.40 per ton FOB Australia as on February 17 to a low of $107.00 per ton as on March 17. Metallurgical coke prices, on the other hand, dropped by nearly 7% to $240 per ton from $257 per ton CFR India as on February 17.

Steam coal prices too are ruling soft with South African standard coal prices softening by 4% or $3.00 per ton between February 17 and March 17 to $76.50 per ton and off-spec (5,500 Kcal/kg NAR) prices falling by $3.20 or nearly 5% to $62.30 per ton during the same period.

The decline in Australian steam coal prices was almost negligible, as it is widely perceived that the miners will start incurring losses if prices fall below the current level of around $73.50 per ton FOB and they will stop production to avoid losses, said a second trader.

Indonesian steam coal prices, particularly low grade steam coal, have remained more or less stable, but mid and higher grades have registered declines of around $1.25 per ton.

"There was some scope for reduction in prices of higher grades of Indonesian coal, which has happened, but for lower grades, the scope for further cut in prices does not exist and as such miners are opting to close their operations instead of selling at a loss," the second trader said.

Where metallurgical coke is concerned, a trader, who mainly deals in this material, said, "The situation is such that if someone negotiates aggressively, traders are willing to offer met coke at a price of $235 per ton CFR India and even at this level there are hardly any takers."

"I am asking buyers to at least come out with their bids, but they are avoiding for the time being in anticipation that prices will fall further. These all suggest that coke prices will fall further from the current levels of around $240 per ton CFR India," he said.

So far as coking coal is concerned, another trader said, the demand from India is extremely low at present and coupled with indications coming from China, the possibility of prime grade coking coal prices touching $100 per ton level is not ruled out at present.

"Only last Friday, we had offered semi soft coking coal at $80.00 per ton FOB Australia and asked the buyers to arrange for their own freight, but failed to finalise the deal as the buyer decided to wait and watch," the trader added.