I had a meeting last week with a major European steel producer. They have been running with minimal coal stocks for the last twelve months. But they are now looking to lift their stock levels for the winter period. But more interesting is their intent to use more PCI and less coke in the blast furnace. This is a global trend which will keep the PCI coal price up around the 80% of HCC. BMA and Anglo just settled HCC at US$152 (few days ago). This means PCI should be around A$130 at today's FOREX. Cash positive is good. This is what financiers have their eye on. PCI price should be settled in the next week of so. FOREX drifting back to the 80's would be nice. but not likely. Most major mining houses using 92-94 as their medium term forecast. COK seriously undervalued, but going OK. Open cut met coal has to be the only place to be in today's space.
COK Price at posting:
5.8¢ Sentiment: LT Buy Disclosure: Held
