Aspirations are vanishing in the coking coal market about price revival. Till about fortnight ago market was agog about turn of fortune with Chinese steel market picking up.

However a premature debacle in finished steel market has stemmed any such movement. The last quarter pricing at USD 165 per tonne, FOB was redemption over the previous the present is disappointment.

Buyers have withdrawn opting to wait expecting prices to decline. Chinese and Indian buyers are keen on consuming inventory accumulated in Q4 on anticipated monsoon and cyclone in Australia. Chinese mills prefer domestic coke at USD 185-200 per tonne, C&F, including 17% rather than import.

Indian mills too are not inclined to go in for major buying owing to sluggish domestic steel market. The current offers at USD 170-175 per tonne, FOB, Australian port is not evoking much interest.

Moreover cheaper offers at USD 160-165 per tonne from Canadian and American sources have provided lucrative alternatives. Even though the prime coking coal sector has traditionally remained Australian bastion a climb down by at least USD 5 per tonne is inevitable.

Clarity will emerge about the trend by next week however despite shrill by miners of unworkable price level there won’t be many takers given the tight finished steel market. Maintainability of Q4 price at USD 165 per tonne seems challenging. On the other hand a roll back by USD 5 per tonne cannot be ruled out.