<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Global coking imports, exports vs SGX price: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Jacqueline Wong)
Messaging: clyde.russell.thomsonreuters.com@reuters.net)) (The opinions expressed here are those of the author, a
columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, Feb 7 (Reuters) - The price of
coking coal has surged to a seven-month high, but the question
is whether the rally in the fuel used to make steel is down to
an improving economic outlook, or whether supply issues in top
exporter Australia are to blame.
The price of Singapore-traded contracts linked to the spot
price of Australian coking coal ended at $345.67 a
tonne on Monday, just below the $348.00 reached on Feb. 3, which
was the most since July 1 last year.
The price has jumped 70.3% since the 2022 low of $203.00 a
tonne, reached on Aug. 1 amid concern that the global economy
was heading into a recession in the wake of the surge in energy
costs sparked by Russia's invasion of Ukraine on Feb. 24.
Since that low, some optimism has crept back into the market
that the global economy will avoid a deep recession, and that
China, the world's largest steel producer, will roar back to
life in 2023 after ending its strict zero-COVID policy, which
had crimped growth.
Coking coal prices, along with those for iron ore, have
rallied on the back of this optimism, with both steel raw
materials recording strong gains this year.
Spot benchmark 62% iron ore for delivery to north Asia , as assessed by commodity price reporting agency
Argus, ended at $124.60 a tonne on Monday, down from the almost
eight-month high of $129.50 on Jan. 30, but still up 57.7% from
the 2022 low of $70.00 on Oct. 31.
The question is whether there are any fundamental data to
back up the recent gains in prices.
The answer is that for coking coal there appears to be both
rising demand and some supply disruptions at work.
Global coking coal imports from the seaborne market rose to
24.84 million tonnes in January, the highest since July,
according to data compiled by commodity analysts Kpler.
India, the top seaborne importer of coking coal, landed 6.06
million tonnes in January, largely steady from December's 6.25
million, but up from 4.98 million in January last year.
Japan, the second-biggest buyer of seaborne coking coal,
imported 5.01 million tonnes in January, up from December's 3.98
million and roughly level with last January's 5.08 million.
Although China is the world's biggest coal importer, it buys
mainly thermal coal from the seaborne market as it sources the
majority of its coking coal from domestic mines and overland
from neighbouring Mongolia.
Nonetheless, China's seaborne imports of coking coal rose to
2.54 million tonnes in January, up from December's 2.30 million
and only slightly below the 2.60 million from January 2022.
Outside of Asia, Europe's imports of coking coal rose to
3.81 million tonnes in January from December's 3.55 million,
according to Kpler.
The overall picture from coking coal imports is that there
has been a move higher in recent months, which does provide some
fundamental backing to the rally in prices.
AUSTRALIA SUPPLY
On the supply side, there are some signs of stress in the
seaborne market, with January exports dropping sharply to 18.82
million tonnes from December's 23.92 million.
This was largely because of a slump in Australia's shipments
to 11.54 million tonnes in January, down from December's 14.30
million, although it's worth noting that U.S. exports also
dropped to 582,157 tonnes in January from 1.53 million in
December.
Australia's shipments have been disrupted by heavy rains in
the coal-mining eastern states of Queensland and New South
Wales, as well as the closure of a key railway line following a
collision.
The Blackwater railway to the port of Gladstone is scheduled
to re-open on Feb. 9, which would be a disruption of 11 days of
a line that delivers around 50 million tonnes of coal annually.
Putting together the increased imports of coking coal and
the supply disruption in Australia and a picture emerges of
rising demand driving prices, with supply concerns currently a
likely temporary froth on top.
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