FOB and ARA discounts narrow

Coal stabilised on support at a level of around US$90/t, pressured by gas prices but supported by oil. Continued freight issues in the Suez Canal and the Red Sea are supported the price of oil.

Petcoke FOB contracts were stable but after buying for the 1Q24 was completed, trade was low. Discounts on FOB contracts remained stable in the neutral zone, but discounts on ARA contracts fell, returning to neutral as the API2 coal price dropped.

Petcoke with 6.5 per cent S is expected to continue in the US$65-75 range with resistance at US$68, US$75, US$95, US$105, US$115 and US$135. Support is at US$60, US$55 and US$45 with multi-year support at US$37. For 2024 a broad range of US$60-115 is expected.

The discount for 6.5 per cent S petcoke FOB sold at US$68 on 20 February 2024 is at 41 per cent when compared with API4 coal sold at US$93 in the 2Q24. The CIF ARA 6.5 per cent S petcoke contract sold at US$89 is at a discount of 17 per cent, when compared with API2 coal sold at US$86 in the 2Q24. 

Freight rates are increasing with the USGC-ARA rate at US$21.