The sharp downturn in seaborne coking coal prices has continued during the past month.Australian export prices have retreated by a further 15% (or roughly $25/tonne at the time of writing in late February), to under $155/tonne FOB.
This is $130/tonne below the first quarter contract prices settled between Glencore and NSSMC in mid-December, when spot prices were closer to $300/tonne FOB. Based on MB Indices, Q4 saw spot prices averaging $66/tonne FOB higher than contract prices. This leaves Japanese integrated mills, who were among the lowest cost steel producers in Q4 (source: MBR Global Steel Cost Service) at a large disadvantage of more than $100/tonne today.
As a result of rising costs, Japanese...