An alleviation of supply concerns in the seaborne coking coal market has led to prices for the steelmaking raw material starting to retreat this month, but just how low they fall will be determined by how quickly demand rises over the next few weeks when Chinese buyers make an expected return.
Fixed-price spot transactions in the seaborne premium hard coking coal market have been scarce in recent weeks, although the levels of both offers and bids have fallen, leading to expectations of a further downward correction in prices.Metal Bulletin's fob Australia premium hard coking coal index has dropped 7.6% since the beginning of this month to reach $240.07 per tonne on Wednesday January 17.A deal was concluded last week on an online trading platform at $259 per tonne fob Australia, but offers on the same platform dropped to less than $240 per tonne this week.The drop in coking coal prices this month has coincided with declines across the steel value chain, with the prices for iron ore, metallurgical coke and steel also retreating.Why is the coking coal price dropping?Market participants say that the key reason for the recent drop in prices is a reduced level of concern about Australian supplies amid...