RBA backs team coal

AUSTRALIAN coking coal exports are expected to further nudge out competition thanks to the low benchmark price, the recent China-Australia free trade agreement, and a low dollar campaign by the Reserve Bank of Australia.

Blair Price

The FTA sliced off the 3% coking coal import duty for Australian exporters, giving them a fresh edge against Canadian and Russian competition.

The recently struck $US93 a tonne Australian hard coking coal benchmark price with Japanese steelmakers for the next quarter, down 15% from this quarter, provided another edge especially when considering the ongoing weakness in the Aussie dollar.

“Aussie miners are being helped as they take back market share by the mid-70c currency,” JP Morgan said on this front.

“But this is not enough for the Australian reserve bank. Now that the Australian dollar has reached its previous target and the budget still faces problems, the RBA is now talking the currency down to 70c. This could keep the pressure on US and Canadian coal exporters.”