Prices for coking coal rose slightly in early December to $250/t

Coking coal quotes in the Australian market rose slightly due to limited supply of raw materials due to adverse weather conditions. At the same time, demand from India, Indonesia and Turkey remained at a high level.

Coking coal prices are also supported by rising demand for steel. Metallurgical plants replenish stocks of raw materials amid rising prices for steel products. Signs of stabilization in the market for finished products strengthen the confidence of producers.

A recovery in demand, weather conditions in Australia and a strong recovery in global steel consumption are likely to push up coking coal prices in the Asia-Pacific region in the coming weeks after falling in November.

Since the beginning of last month, Australian coking coal prices have fallen by more than $64/t. The decline in prices was caused by a reduction in production by smelters due to low margins.

In the first quarter of 2023, coking coal prices are expected to be stable at about $250/t. This level will be supported by demand in India, while demand for coking coal in the EU market will be weak due to reduced steel production.

In the Chinese market (CFR China), coking coal prices were stable last week. As of November 11, 2022, raw material quotes were $299/t, which is in line with last week’s price level.

Sentiment in the Chinese market improved amid news about the easing of quarantine restrictions. However, buyers remain indifferent to imported raw materials with long delivery times. Metallurgists are not yet sure that the authorities will not introduce total restrictions in the near future, so they do not risk buying coking coal with long-term delivery.

Most of China’s steel mills still have low coking coal inventories, so due to uncertainty about imported raw materials, they will have to buy coal at higher prices in the near future to ensure production.

Fitch forecasts coking coal prices in 2023 and 2024 at $200/t and $140/t, respectively.