Energy Economics director, Clyde Henderson said this could be viewed as a readjustment given the substantial increase won by Australian coking coal producers last year.
Low volatile hard coking coal prices are believed to have fallen less, by between US$1.80-US$1.90/t, while low volatile PCI coals have settled at rollover prices or slightly higher.
Semi-soft coals out of the Hunter Valley took a US$2 fall, (7.5%) to US$26.50.
A Commodities Report released on Friday, March 28 by London-based Macquarie Research Metals and Mining division, reported that Australian producers had concluded a “benchmark” settlement of US$26.75/t fob with Tohuku Power, down 6.8% from last year’s settlement with Tohuku of US$28.70
It was believed Japanese buyers had been holding out for prices closer to $26/t ($2.75/t cut) but that last week’s semi-soft coal price settlements (a cut of around $2.20/t) made a smaller cut inevitable.
Macquarie warned of the possibility of over-supply this year given the possibility of increasing Chinese exports of between 5-10Mt. To meet growing demand significant capacity expansions are set to kick in. In Australia capacity increases of between 5-10Mt are expected while Indonesia increases capacity by 6-8Mt.
