Australia’s coal mining operations are slashing workers left and right, as China’s cooldown leads to price drops.
Via the FT: “The spot price of thermal coal, used for power generation, has fallen about 30 per cent over the past couple of years to under $80 a tonne, while contract prices for coking coal, a key steelmaking ingredient, have dropped 50 per cent to $145 a tonne.”
That’s making the big miners such as BHP Billiton and Rio Tinto hop into action to hedge their losses.
“The industry response to the margin squeeze has been to slash overheads, scrap projects and close mines,” according to the FT article. “BHP, the world’s largest exporter of seaborne metallurgical coal, says it has stripped $800m of costs from its coal business and shuttered two unprofitable mines. Glencore Xstrata has abandoned plans for a A$1bn coal export terminal in Queensland, while Rio has reportedly put coal assets worth A$3bn up for sale.”
Current Steel and Raw Material Prices
On Tuesday, August 6, the steel billet cash price experienced the biggest change on MetalMiner’s daily index, rising 4.3 percent on the LME to $120.00 per metric ton. The steel billet 3-month price remained essentially flat on the LME at $145.00 per metric ton.
Chinese steel prices were flat for the day. The prices of iron ore 58% fines from India remained relatively rangebound for the day. For the fifth day in a row, the price of Chinese HRC remained essentially flat. The price of Chinese coking coal was unchanged.
The US HRC futures contract 3-month price held steady on Tuesday, remaining around $616.00 per short ton. The spot price of the US HRC futures contract held steady around $642.00 per short ton.