But that premium has completely disappeared, with PCI and semi-soft both selling for $US75 per tonne last week; below top quality thermal coal at $US77 per tonne.
XCoal chief executive Ernie Thrasher said China’s buying strike was also playing havoc with the numerous coal price indices that are based on the daily prices achieved in transactions between Australian coking coal miners and Chinese customers.
”There should be a raging debate on how can you sell [coking] coal to Japan and Korea on an index driven by China spot sales when there are no China spot sales,” he said.
”So the Australian producers are getting harmed twice; they don’t have the sales to China and their sales to other customers are being priced on an index that has no real price to it.”
In a bid to avoid Australian coking coal, Chinese steel mills are paying between 70 per cent and 100 per cent more to buy coal mined in China and Canada.
Some in the industry believe European mills with long-term contracts to buy Canadian coal are on-selling that product to China, then securing shipments from Australia and pocketing the arbitrage between the two prices.
”There is a perception this is good for anyone who is not Australian but I don’t subscribe to that,” said Mr Thrasher.
”I think any exogenous factor that affects global trade and distorts the market causes disrupted trade flows to occur which eventually sort themselves out, and when they sort themselves out, normally it is not a good ending for somebody.
”It is a little bit like musical chairs, when the music stops there is not enough chairs for everyone and someone is the odd one out.”

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