Coking Coal Prices Surged To Seven-Month High

Supply problems in the world’s leading exporter of coking coal- Australia, could be the reason behind the increase in the price of coking coal. The price of Singapore-traded contracts tied to the spot price of Australian coking coal finished at $345.7/ ton, a little under the $348 peak that was hit on 3 February 2023, (highest since July 2022). Since the low of $203.10/ ton (on 31 July 2022), the price has increased by 70.4%.

Market Optimism 

Since the dip, the market has gained optimism that in 2023, China will bounce back after terminating its stringent zero-COVID policy that hampered its growth and the global economy will escape a deep recession. This optimism has hiked coking coal prices and iron ore prices. On Monday, the spot benchmark 62% iron ore price reached $124.60/ ton, up 57.8% from the low of $70.05 on 30 October 2022.

Supply Problems And Increased Demand

Kpler reports that in January 2023, the amount of coking coal imported globally from the seaborne market increased to 24.85 MnT, the highest since July 2023. Australia’s exports decreased from 23.92 MnT in December 2022 to 18.85 MnT in January 2023, due to heavy rains and the shutdown of a crucial railway line.

Insight

The overall picture reveals higher coking coal imports and supply disruption in Australia, which have caused prices to surge temporarily due to supply concerns. Rising demand and supply disruptions together imply that the recent increases in coking coal prices are supported by an imbalance in demand and supply.

Read More – India Witnesses Change In Coal Production In January 2023