The fall results from blast furnace operators running down their stocks of hard coking coal, due to the increased price premium over the lower quality coals

Meanwhile, provisional data released by the Australian Bureau of Statistics shows that total Australian coal exports in 2002 were 203.7 Mt, up 5%.

A feature of the export performance in 2002 was the 11.8 Mt (13.6%) increase in steam coal exports, with market share being taken from Chinese steam coal exporters during the year.

On the other hand, semi-soft/PCI coal exports fell 2.9 Mt to 38.96Mt under the pressure of cheaper exports from China, Indonesia and Russia. Hard coking coal exported increased to 65.17Mt, up 1.4%

“It is worth noting, however, that substantial tonnages of low volatile (high rank) PCI coal are recorded under the hard coking coal category in Australian export statistics – the actual descriptor for this category is ‘High rank metallurgical coal (hard coking)’. Hence, both the weakness of semi-soft/PCI exports and the strength of hard coking coal exports are a little overstated by the official data,” said Clyde Henderson of Energy Economics.

Currently, premier hard coking coal prices are 12.4% higher from the preceding year, at US$48/ton.

ABARE expects downward pressure on prices in the current contract price negotiations between Australian coal exporters and Japanese steel mills. An appreciating Australian dollar against its U.S.counterpart is likely to cut the average unit export value of coking coal by 5.7% to A$71.60/ton in 2002-03, before falling 3.1% to A$69.40/ton in 2003-04, Abare said.

On a global basis, Abare forecasts the coking coal trade to grow 1% to 197 million tons in calendar 2003 and another 1.1% to 199 million tons in 2004. Increased demand is expected from India and North Asia, driven by increases in blast furnace-based steel production.