Ann: Daily share buy-back notice - Appendix 3E, page-2

The biggest buyer of coking coal stops buying...and what happens to coking coal prices?  Here is the blurb from Wednesday's report:

 

Met Coal Mild +ve.Rising Even With Lacking Clarity. MB Spot PremiumMet Coal (Australia Export FOB) is UP US$3.08/t overnight to US$225.23/t. Thespot seaborne coking coal price was up again overnight, with the market gainingsome traction withexpectations growing for the ban on customs clearance for imports of thesteel making raw material in China to be lifted in early January (previousestimates were thinking December 15). The lull in the seaborne coking coalmarket appears to have rubbed off on trading activity at Chinese ports (ie.Chinese aren’t even buying there, either); Chinese buyers typically seek outimported coal at the ports when they unable to secure seaborne cargoes, or whenit is riskier to acquire such cargoes. Ex-China, buyers are acknowledging afairly tight market, however not one tight enough to justify prices of +$230/tfob Australia. Even in the face of recent Chinese import restrictionheadwinds, the seaborne coking coal price remains resilient! 

So they are already talking about $230.  What no one seems to say...is that after January 1, China will start importing met coal again.  Till then, they will be running down their not exactly high inventories of met coal.  By January 1, they will be dying for met coal imports.  The rest of the world is not exactly awash in met coal inventory either...as they all thought that met coal prices were "too high" when it was $180 back in August 2018.  In fact, if you remember, our brilliant management claimed back then, that the futures curve was flat at US$180 and could not go higher...so they needed to save us from ourselves.  

What all this means is that we are slowly but surely walking into a met coal price rally.  Despite all that is going on in the global markets, oil prices etc....coking coal keeps marching higher.  Steel margins remain high in China...and in the rest of the world.