Atlantic coking coal: Prices firm on China demand

Source : https://www.argusmedia.com/en/news/2160809-atlantic-coking-coal-prices-firm-on-china-demand?backToResults=true

 

The US coking coal market held firm early this week with offers for first-quarter spot deliveries buoyed by interest from Chinese buyers seeking alternatives to Australian coals well into 2021.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal jumped by $5/t to $116/t, driven up by limited supply availability and offers made to Chinese buyers for first-quarter deliveries nearing $160/t cfr. The high-volatile A and high-volatile B assessments remained at $119/t fob Hampton Roads and $105/t fob Hampton Roads, with tight spot supplies and a bullish demand outlook for the first quarter supporting a rarely seen premium to Australian fob prices.

While the last confirmed trade for a high CSR low-volatile US coal at $155/t cfr was concluded last week between a Chinese trader and a Chinese mill, offers from US mining firms and traders this week have moved up towards $160/t cfr. Some Chinese traders are confident that a $160/t cfr price would be attainable, as long as the restrictions on Australian coals remain in place.

A Pennsylvania-based mining firm that does not normally sell to China enquired with a major US producer for one or two trains of low-vol coal to top up a cargo that is to be sold to a Chinese buyer. "I don't think we'll have much availability for that though because of how we are doing directly into China — the appetite seems to grow every day," the larger producer said.

Prices for high-volatile coals held steady amid strengthening demand in South America and Europe, and both grades remain in relatively tight supply. Some Brazilian mills continue to look for discounts on high-vol A cargoes, but there is very little availability, miners say. "I think you can only get lower quality high-vol B for the rest of the year now, the better coals are sold out," a European mill said.

A US mining firm received an enquiry for a January delivery of high-volatile A coal from a major European mill, but had little spare availability. "We don't have a whole cargo available for January," said the miner, "but we'll offer a couple of holds at current spot levels".

European mills are slowly increasing production, as strong demand from the car sector compensates for weaker demand in other areas such as heavy plate. "But the additional tonnes we're selling are just about enough to minimise fixed costs, the prices are too weak for us to be making real money from it," a mill said. European mills remain constricted in terms of purchasing because of shortness of cash, and most are limited to buying only what they require. Blast furnace utilisation has continued to pick up in Europe, averaging at around 80-85pc for many and with some mills even indicating to their coal suppliers that they plan to return to pre-Covid utilisation levels by the second quarter. Meanwhile, the European hot-rolled coil price continued to surge upwards, rising by €10.50/t since 13 November to €534.25/t today, on a worsening supply shortage and a lack of import offers.

A Colombian coke producer offered a cargo to a European mill at $260-270/t fob Colombia, as coke remains in tight global supply, with particularly strong demand in China. The Argus assessed 62 CSR Chinese met coke export price rose to a nearly two-year high of $345/t last week, as domestic producers proposed a seventh round of price hikes amid persistent tight supply.

Related Regular News: