Speculations of coal mining restrictions in China supporting prices

Exclusive

23 January 2017

Chinese vacations are just round the corner and traders are preparing to close deals for post-holiday mid February period. Prices of imported coking coal were expected to slide down by atleast $15-20 per tonne post vacations  but speculations of likely coal mining restrictions in the second quarter have allowed the current prices to stagnate at $182-184 per tonne levels for the immediate trades.

$145-150 per tonne levels were also expected for Q2-CY2017, however if the speculated restrictions become reality then there is full tendency for the commodity to spike back to $300 per tonne levels by mid year.

In the current market, Chinese mills have started to restock at the current levels of $182-184 per tonne CFR China in smaller tonnages while traders are holding back sales and are taking short positions with anticipation of a likely price hike post vacations due to the likely restrictions.

Demand slowdown has put pressure on both Indian and Chinese buyers which is clearly visible in the coking coal trade where inspite of many queries, actual trading is very low in anticipation of better stable trading environment and prices.

Australian miners are selling coking coal at $173-175 per tonne FOB without much change seen from the last week closing.