"The metallurgical coal market is tightly linked to the steel market, as approximately 0.8 tonnes of metallurgical coal is used to produce 1 ton of crude steel in a blast furnace. Steel demand is closely linked to country growth, as approximately 50% of steel is used in the construction industry, 16% in the machinery industry and 13% in the automotive industry. Chinese steel production is at its highest level in 5 years, and demand for metallurgical coal remained strong during the quarter, which supported the FOB price for premium hard coking coal ranging between US$178 and US$242. The significant increase from Q3 2017 is ascribed to strong demand from steel mills and supply concerns mainly associated with the Australian logistics chain. The higher US$ denominated price, coupled with an average AUD exchange rate below $US0.80, supported significant margins for Australian coking coal producers." (BCC Dec Qtr report)
This coking coal summary is important as general information for CKA shareholders/posters, IMO.
CKA Price at posting:
4.9¢ Sentiment: Buy Disclosure: Held
