The Market for Seaborne Coking Coal Coking coal is used in the steel manufacturing process. Australia remains the largest supplier of seaborne coking coal in the world. There has been significant growth in demand experienced from China and future demand growth is foreseen from India and Southeast Asia. Australian coking coal producers enjoy the added benefit of having some of the lowest internal logistical and transport costs of all coking coal exporters.
Hard coking coal prices recovered in 2016 as prices increased from a low of USD 75 per tonne in Q1 2016 to reported highs in November of USD 310 per tonne. The coking coal price increases, along with the lower Australian dollar and lower costs of production due to less buoyant demand for labour and mining services, made for record high margins by Australian producers. The reason for the recovery in the coking coal price was ascribed to the curtailment of Chinese coal production through the reduction in annual working days from 330 to 276 in domestic Chinese coal mines. Growth in fixed asset investment, particularly in Government sponsored infrastructure projects, led to increased steel demand in China at a time when the domestic coking coal supply was decreasing.
