Valuations for the junior end of the market were historically very low if prices paid for recent acquisitions of explorers and coal mine developers were any guide, it said.

From 2010 to 2012 a $3 per tonne value for measured and indicated resources was considered high and it was over this value that Riversdale Resources was acquired by Rio Tinto.

Enterprise value-to-resource comparisons indicate that Carabella and Stanmore are attractive at current levels on this metric, especially considering Stanmore has an advanced thermal coal project in the Surat Basin.

“While slower steel growth in China has hurt the coking market there is still growth nonetheless, and from a bigger base,” Foster said.

“Coking coal is still a scarce commodity and some of the junior explorers are trading more cheaply than they deserve.”

The metallurgical coal market finally pulled out of its downward trend in June on the back of tightening supply, according to Foster.

Quarterly "benchmark" prices set with the Japanese steel mills have increased from $US210 per tonne for premium hard coking coals to $225/t.

In Australia, supply has been restricted by the ongoing industrial action at BHP-Mitsubishi Alliance mines.

“It is likely that these mines will continue to operate at below capacity until a new collective workplace agreement is in place,” Foster said.

“There is plenty of speculation that a Chinese stimulus package is on the horizon. This is a reaction to the recent run of weak economic data out of China, and the change of Chinese government in August. Historically, a new government has stimulated the economy and with Chinese inflation under control there is scope for this to happen.”