Read this Reuters story just published a few minutes ago! China has banned imports of Australian coking coal causing North American coking coal prices to explode to new all-time highs! Morien Resources (TSXV: MOX) owns a high value 2%-4% gross production royalty in North America's only major fully permitted coking coal mine that could potentially restart production within months for exports to China!
Coking coal closing in on record after China's ban on Australia imports
LAUNCESTON, Australia, Sept 7 (Reuters) - While the price of iron ore is slumping in Asia, that of coking coal is heading in the opposite direction, driven, ironically, by China's ban on imports from Australia and supply struggles.
Contracts of coking coal traded in Singapore, and based on the spot price of Australian cargoes, ended at $274 a tonne on Monday, just below the close on Sept. 3 of $274.33, which was the highest price since April 2017.
The contract has surged 170% since the end of last year and is near the all-time closing high of $299.33 a tonne hit in November 2016.
Australia is the world's largest exporter of coking coal, the other key raw material for steelmaking besides iron ore, and was a major supplier to China, the world's biggest steelmaker, prior to Beijing's unofficial ban on imports. The ban was put in place last year as part of a political dispute with Canberra that is still continuing.
It may seem illogical that Australian coking coal has rallied strongly when it has lost a top customer, but in effect the Australian price is being dragged higher by even higher prices of coking coal from other countries.
China is being forced by its own policies to source coking coal from other producers, and is having to pay a massive premium for the privilege.
The United States is the world's second-biggest shipper of coking coal, and prices of cargoes loading at the port of Hampton Roads are at record highs, according to assessments by commodity price reporting agency Argus.
Low volatile metallurgical coal at Hampton Roads ended at $315.05 a tonne on Sept. 3, having exceeded its previous record high of $295.40 from May 2011 on every trading day since Aug. 26, according to Argus data that goes back to mid-2010.
The Hampton Roads price has historically traded at a discount to Australian cargoes, but this was reversed in November last year, and it has traded at a widening premium since then.
The flip to a premium for U.S. coking coal coincided with the full impact of China's unofficial ban on cargoes from Australia.
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