It is expected that at the end of Q4 2024 and in Q1 2025,
prices will stabilize and begin to rise to $220-240/t
In August,
the global coking coal market was characterized by weak demand in key regions
and oversupply, with periodic revival amid purchases of certain batches of this
raw material or its resale, and fluctuations in futures on the Dalian Commodity
Exchange. This trend continued in September.
In early August,
Australian coking coal rose slightly in price amid increased interest in
buying. However, traders predicted that the price had already bottomed out (FOB
Australia was quoted at $216/t) and would remain low unless there were supply
disruptions.
In the
Chinese market, both buyers and sellers took a reserved stance at the beginning
of the month due to another round of coke price declines, a reversal in futures
on the Dalian Commodity Exchange, and an increase in coal supply from local
mines.
The market for imported raw materials also supported the negative
dynamics – at the end of August, prices for premium Australian coking coal (PLV
HCC) fell below $200/t for the first time in two years, Wood Mackenzie noted.
As always,
China’s strong influence shaped trends in prices and consumption. Coke
production in the country in the first 8 months of this year decreased by 0.4%
y/y – to 324.78 million tons. In August, these volumes amounted to 40.89
million tons, down 2.1% year-on-year and 1.6% compared to July.
At the same time, in August, India abandoned its plan to create a consortium of
state-owned companies to jointly negotiate coking coal imports, which was
discussed earlier this year. The reason was disagreements between steel mills
over the required grades of raw materials. In addition, some steelmakers
expressed concern that they would lose discounts on their long-term contracts
if they negotiated through a consortium.
According to
S&P Global, Australian coking coal prices (FOB Australia) fell by 7.2% – to
$180/t in two weeks, September 4-18. Prices for this raw material in China (CFR
China) fell by 4.8% – to $196/t during the same period.
In
mid-September, the Asian coking coal market revived somewhat, with prices
rising amid increased trade: in India, steelmakers were building up stocks in
anticipation of rising domestic demand, and in China, factories were
stockpiling raw materials ahead of the upcoming Golden Week (October holidays,
a traditional period of long weekends). However, traders did not forecast
strong growth, pointing out that demand in the Chinese market remained weak and
there was still an oversupply.
At the end of
last week, Chinese coke producers raised their supply for the first time after
a series of eight consecutive cuts that had been in place since the end of
July. According to BigMint, some steel mills in northern China have agreed to a
$50-55/t price increase. However, key enterprises in Hebei and Shandong
provinces have not yet made official statements on this issue.
After the
first round of coke price increases in China, market sentiment improved
slightly, and prices for Australian coking coal began to rise (up to $187/t FOB
Australia).