Seaborne metallurgical coal and coke markets have entered 2021 in the wake of a transformative fourth quarter of 2020, which saw significant shifts in trade flows and price dislocations due to China's temporary halt on Australian coal imports.

Premium low-volatile hard coking coal prices slumped 23% to $101.50/mt FOB Australia at end December from the quarter before, while prices on a CFR China basis surged 40% over the same period to $201/mt, S&P Global Platts data showed.

Such price dislocation was observed across all grades of metallurgical coal in Q4, with the bulk of Australian met coal spot trade flow shifting from China to other destinations, widening the price differential between the FOB and CFR China benchmarks.

China has previously relaxed its import quotas each January, but this year the market is less sure that Australian imports will resume, given the state of relations between the two countries. An optimistic view sees cargoes waiting at Chinese ports being allowed to unload before new bookings can be made for Australian met coal. The pessimistic view is that the ban, which was imposed in October, will be extended. The latter view seems more likely.