Increase in coking coal prices is inevitable

Coke prices on the Chinese market increased due to a lack of supply and high customer activity.

European steelmakers also point to an increase in demand for coking coal for steel production as a result of the needs of the automotive industry and the need to supply raw materials for infrastructure development in Europe.

In the two weeks from 5 December 2017, the average Australian coking coal price increased by more than 6.4 percent. And on Tuesday, December 19, it was already $ 236.10 per ton. Since the beginning of December 2017, coking coal has grown by about 10 percent, and since the beginning of November, by 33 percent.

A study by the Industrial Development Agency indicated that the coke market may still grow as Chinese steel mills did not replenish their stocks until the end of the year. This means that purchases may increase in the Chinese market in January 2018.

Steel producers can afford higher costs because of the higher margins. With the increasingly difficult supply of coke due to production cuts at Chinese coke plants, steelmakers are forced to accept higher prices.