Coking Coal price hits 7-month high

Coking coal, along with premium grade iron ore, are the two ingredients essential to blast furnace-based primary iron production.

The higher the price of both, the better the business case for our Matmor technology.

And notwithstanding a couple of storm-driven supply crunches appearing as price spikes in the chart below, coking coal is at a new 7-month high, led by demand out of India and Japan.

Similarly, high-grade iron ore has passed USD140 per tonne.

 

Accordingly, the steel price has been trending up.

This is great if you’re selling coking coal, and not so great if you’re an emerging nation like India trying to rapidly develop its infrastructure at a reasonable cost.

Our last review of the comparative economic performance of Matmor against a blast furnace (2017 Annual Report, page 39) looked like this:

Click to enlarge

The above table compared the original Techno-economic Feasibility (TEF) study results (left side, early 2016 prices) to the increased price of coking coal and iron ore in October 2016.

The peak in coking coal prices in October 2016 of $246.50 was driven by weather-related disruption to supplies. The current price (12 Dec 2017) of $236.50 is driven by ‘healthy’ demand. Current iron ore pricing has risen 50% since.

The article below from industry journal Bulk Handling Review highlights the impact the demand driven price increase is having, with BHP looking to expand coking coal production from 48 million tonnes a year to as much as 70 million tonnes.

We’ll likely see expanded capacity from other suppliers seeking to take advantage of the rising price.

Meanwhile, brown coal and low-grade iron ore prices remain relatively stable, reinforcing the underlying value proposition of our Matmor process.

Read more below…

BHP looking to boost coking coal output

Bulk Handling Review | 13 December 2017 | Oliver Probert

As the price of coking coal reaches a seven-month high of around US$236 a tonne, BHP is studying its options to potentially boost production from its Queensland assets, according to multiple reports.

Healthy demand for the product, which is used in steelmaking, drove the benchmark price up 33%…

Source: BHP looking to boost coking coal output