MARKET-- China Trade Ban – A Stranglehold on Australian Prices

摘要

December posted mixed results for metallurgical coal prices. The December price for Premium HCC averaging around US$101.3/t FOB Australia, down from US$102/t from the month prior or down 25% from US$135.6/t in the previous corresponding period. China’s unofficial ban on Australian metallurgical coal continued throughout December, putting a stranglehold on imports and pressure on prices as the country is the key driver of pricing. Since the start of the year, the price has dropped a sizeable 32.6% from US$150.3/t, squeezing the margins of many miners, who have been forced to scale back operations and drop productivity levels in response. Many have been left scratching their heads as to whether the bans will continue into 2021 against the backdrop of electricity shortages in China and sky-high iron ore prices. A recovery of the Australian coking coal prices will be dependent on Chinese government policy and signals.