Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
The price of coking coal plunged again on Friday with the industry benchmark price tracked by the Steel Index dropping 9% or $26.10 to $263.40 a tonne as supply disruption following tropical storms in Australia begin to ease.
Last week the price of Australia free-on-board premium hard coking coal jumped to highest since the second quarter of 2011. That price spike was also the result of flooding in Queensland that saw quarterly contract prices negotiated at an all time high of $330.
While coking coal is returning to more expected levels, iron ore’s unnerving decline appears to have been arrested
Cyclone Debbie caused serious damage to key rail lines serving mines in the state of Queensland and while three lines have now reopened according to operator Aurizon, but large sections of the Goonyella railroad in the centre of the network is only be expected to be up and running in a week’s time.
Earlier expectations were that roughly 12–13 million tonnes of Australian met coal cargoes destined for China, India and Japan could be delayed, but Aurizon said this week up to 21 million tonnes have been affected.
A total of 221 million tonnes of coal was exported last year from Queensland, according to the Queensland Resources Council quoted by Reuters and of that at least 75% be steelmaking coal. The global met coal market is around 300 million tonnes per year with premium hard coking coal or PHCC constituting more than a third of the total market. More than half of PHCC seaborne coal come from Australian producers according to TSI data.
A survey of economist and investment bank analysts by FocusEconomics show prices are expected to decline substantially later this year. The median forecast is for met coal to average $146 per tonne in Q4 2017 and $130 during the final quarter next year. Coking coal averaged $121 a tonne in 2016.
While coking coal is returning to more expected levels, iron ore’s unnerving decline – a third over just the last month – has now turned around.
The Northern China import price of 62% Fe content ore advanced for a third day on Friday trading at $67.40 a tonne, up 4.2% on the day and just into positive territory for the week. The steelmaking raw material after dipped to a six-month low of $61.50 per dry metric tonne on Tuesday according to data supplied by The Steel Index.
Comments
Luke Bailey
9% does not a crash make.