Coal news and updates

Coking coal price hits record highs as Chinese steel-makers face pain

The price of metallurgical coal has risen to record levels as trade tensions and border problems push the cost for Chinese importers sky-high.

Coal for coking purposes has soared despite declines in iron ore values attributed to Chinese steel-makers abiding by a government directive to avoid buying from Australia.

The value has surged to $US410 a tonne in the past week, representing a more than tripling in price since early 2020.

Coking coal is now overtaking iron ore as the largest input cost for many of the world’s steel mills.

Mining analyst Peter Strachan said while the booming price appeared counterintuitive given the slide in iron ore demand, logistical issues in Asia were at play.

“Normally they get a lot across the border from Mongolia but COVID restrictions have meant they haven’t been able to get enough truck drivers to do it,” he said.

“Shipping costs have skyrocketed, the Chinese are just scrambling and paying over $US500 a tonne for the stuff delivered. Ex-Newcastle it’s well over $US400, that’s a new high.”

With poor domestic supplies of metallurgical coal, Chinese buyers were racing to source shipments from across Asia, North America and as far afield as Columbia as a result.

As a result of China’s hunt for new suppliers, major steel-making nations with limited domestic metallurgical coal such as India, Taiwan, South Korea, Japan and the EU are now increasingly turning to Australia.

Director of the Bowen Basin Mining Club Jodie Currie said the loss of the Chinese market had opened new doors for the region’s miners.

“I think it gave them opportunity to look at other markets, Queensland coal is sought after across the world,” she said.

“There were certainly shock waves sent through the industry but we’ve diversified, we’ve looked at other markets.”