Glimmer of interest in China augurs well for Q1 coking coal price
Strangely China the nemesis of coking coal market has given the lead in revival. If latest reports are to be believed spot business for China has been concluded at USD 160 per tonne recently. In first turn of events wherein the transactions levels never crossed USD 145 per tonne to USD 150 per tonne in Q3. A climb of USD 10 per tonne is backed by pick up in interest by the Chinese mills who aspire to ramp up production in the light of pick up in finished levels. After an encouraging rally of 9% in finished levels after National Holiday a sense of optimism is prevalent.Q1 negotiations will conclude by mid of December draped in the halo of settlement even higher than Q3 benchmark of USD 170 per tonne. Japanese mills on the contrary are sulking after having settled for contractual pricing during Q2 and Q3 above the spot levels.However recent resistance by Australian miners in backtracking form offers at USD 160 per tonne to Indian importer and withdrawing from spot market is distinct sign of strengthening in the market. USA supplies are unlikely to pick up given the logistical impediments after thunder Sandy and Athenia. Re election of President Obama is another nail in the coffin of coal mining with unambiguous tilt towards clean fuel.The rally is restricted to higher grade Hard Coking Coal. Moreover experts opine that even a level of USD 170 per tonne is not enticing for miners to desist from production cuts.
BND Price at posting:
28.0¢ Sentiment: LT Buy Disclosure: Held
