The seaborne coking coal market rose in October 2018 on firm demand from China and India and tighter supply, according to market sources.
According to information available with Steel Insights, the premium variety was quoted higher at $221 per ton FOB Australia on October 30, 2018 as against $199 per ton FOB Australia on September 28, 2018. Peak Down prices were quoted at $222 per ton FOB Australia on October 30, 2018 as compared to $200 per ton FOB Australia on September 28, 2018.
Chinese coking coal futures climbed as Beijing’s flexible approach to industrial production curbs helped fuel demand in the country. Also, supply restrictions supported the steel-making raw material. China has opted not to put a blanket curtailment on production by industrial plants this winter, including steel mills. Instead, it is allowing provinces to set their own output restrictions based on respective emission levels. It’s the second straight winter that China is implementing the curbs as part of its battle against pollution.
This implies that overall demand for coking coal will be more than expected. Such market expectations are providing some upside for prices.
On the supply front, coking coal supply in China is also tighter as winter approaches. This is so because, the transport of thermal coal is being given priority over coking coal, sources said.
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