What caused changes in coking coal prices?

The long-awaited rise in coking coal prices on world markets for mining companies is gradually affecting steel production. In 2010-2013, the boom in high coking coal prices was driven by strong demand for steel products and rising prices in most regions of the world.

Currently, the rise in prices for coking coal was mainly due to the administrative decisions of the Chinese government, which allowed to reduce coal production in the first half of the year by almost 10 percent. In addition, short-term logistical problems arose in Australia.

The Chinese government has decided to limit working days in mining from 330 to 276, which is, among other things, part of the economic restructuring of the mining industry. According to the latest information, Australian coal benchmark prices have been set at 200 USD /ton, which is also a reference point for mining companies, which are offering their customers a more than 100% increase in coking coal prices in the fourth quarter.

However, coal recipients will not be able to sustain price increases for long by producing steel and coke products. History teaches that the market will be postponed until the coal market changes for at least 6 months.