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Post Cyclone Debbie: Now What

Post-Cyclone Debbie: Now What? By Steve Doyle/BtuBaron LLC (May 8th, 2017) Where are coking coal prices at the moment? As a former commodities trader, the market price of coal is only meaningful when tested by a sufficient number of buyers and sellers. The post-cyclone market presents a conundrum of sorts. While the transportation chain in Queensland has many weeks to go before it is ‘business as usual’, the backlog of unfilled orders is formidable. How much ‘spot’ coal is actually available from Australia is difficult to quantify, but the fact that very few physical spot transactions have been reported leads me to believe that the amount is small and what few transactions may have occurred have probably been priced to index. Furthermore, I can imagine that some traders may have bought high-priced cargoes and are now trying to cut their losses by exiting those positions which might have exaggerated the post-Debbie price decline. So where are coking coal prices at the moment? Okay, so I didn’t answer the question. The most recent Platts index (Fri May 5) was $188. Five weeks ago it was $158. Three weeks ago it was $302. [Please click on button to read the rest of the article.]