Coking coal prices started to pick up after a month-long weakness. Both Chinese and Australia FOB hard coking coal prices increased by ~3% since early August. The shut-down of some coal processing plants in Lvliang city of Shanxi Province to meet environmental protection standards worsened the supply of coking coal (particularly premium coking coal). Meanwhile, coke plants need to replenish their stockpile as downstream steel production remains strong. We expect domestic demand will trigger more coking coal imports and prices will rise further. Stocks under Argonaut coverage which should benefit from this event include Fushan (HL:639, Under Review) and Stanmore (ASX: SMR, BUY).
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