“The ink has barely dried on April-June quarterly price settlements but the market is already focused on the extent to which prices will rise for the July-September shipment as many market participants expect this period to mark the peak of the current coking coal price cycle,” Goldman said in an afternoon trading report yesterday.

 

The investment bank is forecasting prices to average $US250 a tonne in the second half of 2010 but noted that surging iron spot prices and reports of $270-280/t settlements for delivery to India might suggest more upside is to come.

 

Goldman also said Chinese merchant coke was fetching more than $500/t free-on-board in yet another bullish signal for coking coal.

 

“Improving availability from Hay Point could provide some respite for beleaguered buyers but for the time being the price direction is up.”

 

Thermal coal is seen as less exciting as spot prices hover around $98/t in line with Xstrata’s recent annual benchmark.