Atlantic coking coal: US prices up, demand brisk
US coking coal export prices ticked higher in the past week, supported by gains in the Asia-Pacific market and a brisk pace of enquiries from buyers globally.
The Argus weekly fob Hampton Roads assessment for low-volatile coking coal is at $187/t today, up by $2/t from a week ago. The weekly fob Hampton Roads assessment for high-volatile type A (HVA) coking coal is up by $1.50/t at $199.50/t, while the high-volatile type B (HVB) index is up by $1/t at $165.50/t.
Spot enquiries have risen steadily since the beginning of February, with more coming in now than have been seen yet this year, US market participants said. One producer attributed the uptick in activity to a combination of Australian cargo delays and widespread expectations of prices rising further now that Chinese buyers have returned – spurring other mills to lock in their additional spot requirements now.
A trader noted that it might not be accurate to describe all the latest enquiries in the market as true spot business, adding that in some cases it is a matter of laycans for pre-booked contract tonnes being adjusted or mills looking to add additional tonnes to existing term contracts. One such mill was recently noted looking to add extra HVA to an existing supply contracting after encountering blending difficulties with trials of a different origin.
Talks are now largely focused on the second quarter or further ahead, with most US suppliers understood to be sold out for the first quarter. One producer said its negotiations on high-volatile grades are currently all being done on an index-linked basis, at slight discounts or premiums depending on the exact grade and customer but without significant deviation from those market reference points.
Capesize freight rates from Queensland to Rotterdam edged down a further 15¢/t in the past week to $9.50/t amid sluggish activity, taking indicative cif Rotterdam prices for Australian premium hard low-volatile coking coal to $217.90/t – up from $210.65/t a week ago.
Panamax rates from the US east coast to Rotterdam are pegged at around $8.50/t, leading to a cif Rotterdam price for US low-vols of around $198/t.
Panamax rates from the US east coast to India have slumped lately, last assessed by Argus at $21.25/t – down from $27.50/t at the start of 2019 – in part owing to a drop in thermal coal exports. The drop is also underpinned by seasonal factors as the dry bulk market waits for South American grain shipments to start in March/April, helping to alleviate the oversupply of available ships.
Russia
A European mill is in negotiations to book an undisclosed volume of semi-hard high-volatile Russian coking coal – a particular brand previously only used in Russia's domestic market or exported to the Far East, according to a market participant close to the talks. The mill's interest in starting to use this product in its blends aligns with Europe's longer-term strategy to reduce reliance on Australian premium grades, although Russian coking coal is often met with mixed reactions in Europe depending on the specifications.
"The big question is not whether the Europeans can use this type of coal - they can, albeit at a lower percentage than Asian mills. But whether it's competitive compared to high-vol blends from the US – that remains to be seen," the same market participant said, noting that Russian port capacity constraints may also render these Russian grades less desirable than US equivalents.
Colombia
Domestic coking coal prices have come under further pressure amid the latest wave of restocking, as local coke plants push for discounts. A Colombian market participant said domestic coking coal prices have come down by around 15pc in recent weeks, to around $96.05/t from $113/t ex-mine, albeit some price variation is assumed depending on exact grade and region.
By contrast, export prices are supported by firm seaborne fundamentals and tentative gains in the tier two Asia-Pacific market as Australian rail capacity cuts and recent heavy rainfall keeps supply tight. The Argus weekly fob Colombia assessment for mid-volatile coking coal is at $167.50/t today, up by 50¢/t from a week ago.
Related news posts
Japan’s JBIC to finance Chilean copper mine development
Japan’s JBIC to finance Chilean copper mine development
Osaka, 26 April (Argus) — Japan is enhancing its financial support for the development of copper mines in Chile, as part of efforts to increase its self-efficiency of base metals. State-owned Japan Bank for International Co-operation (JBIC) on 25 April signed a $248mn loan agreement with Chile-based joint-venture Compania Minera Arqueros (CMAQ) to finance development of its Arqueros copper project in Chile. CMAQ is 80pc owned by Japanese copper producer Nittetsu Mining and 20pc by Chilean firm Fondo de Inversion Privado Talcuna. The load will be co-financed by other Japanese private-sector financial firms, including Sumitomo Mitsui Banking, Mizuho Bank and MUFG Bank. The total co-funding will be $355mn. CMAQ plans to use the funding to develop Arqueros, located 35km northeast of La Serena. The mine is expected to produce 1.8mn t/yr of crude ore and 55,000 t/yr of copper concentrates for 15 years. The company aims to start operations in 2026. Nittetsu is to secure all the output from the project. The latest deal follows last month's loan agreement by JBIC and other financial institutes to provide $2.5bn to develop the Centinela copper mine in Chile . Japan relies on all its copper concentrates demand from imports, which has prompted the government to secure long-term and stable supplies of copper resources. The country's strategic energy plan has a target to achieve at least an 80pc self-sufficiency for base metals, including copper, by 2030. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US economic growth slows to 1.6pc in 1Q
US economic growth slows to 1.6pc in 1Q
Houston, 25 April (Argus) — The US economy in the first quarter grew at a 1.6pc annual pace, slower than expected, while a key measure of inflation accelerated. Growth in gross domestic product (GDP) slowed from a 3.4pc annual rate in the fourth quarter, the Bureau of Economic Analysis (BEA) reported on Thursday. The first-quarter growth number, the first of three estimates for the period, compares with analyst forecasts of about a 2.5pc gain. Personal consumption slowed to a 2.5pc annual rate in the first quarter from a 3.3pc pace in the fourth quarter, partly reflecting lower spending on motor vehicles and gasoline and other energy goods. Gross private domestic investment rose by 3.2pc, with residential spending up 13.9pc after a 2.8pc expansion in the fourth quarter. Government spending growth slowed to 1.2pc from 4.6pc. Private inventories fell and imports rose, weighing on growth. The core personal consumption expenditures (PCE) price index, which the Federal Reserve closely follows, rose by 3.7pc following 2pc annual growth in the fourth quarter, although consultancy Pantheon Macroeconomics said revisions to the data should pull the index lower in coming months. The Federal Reserve is widely expected to begin cutting its target lending rate in September following sharp increases in 2022 and early 2023 to fight inflation that surged to a high of 9.1pc in June 2022. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's MinRes posts higher 1Q spodumene output
Australia's MinRes posts higher 1Q spodumene output
Singapore, 25 April (Argus) — Perth-based major lithium and iron ore producer Mineral Resources (MinRes) has reported higher total spodumene concentrate output from its sites in January-March, and higher spodumene prices later in the quarter. Total attributable spodumene concentrate production of the firm across its assets rose to 170,000 dry metric tonnes (dmt) (see table for detailed breakdown), up by 3.7pc on the quarter and by 63pc on the year, according to the firm's latest quarterly activity report. Total attributable spodumene concentrate shipped volumes fell by 2.9pc on the quarter but rose by 50pc on the year to 166,000dmt. MinRes has an ambitious target of 1mn t/yr of lithium attributable within the next four years, said its managing director Chris Ellison last month during the firm's half-year results presentation. The firm has been aggressively expanding, several delegates told Argus at the Tribeca Future Facing Commodities conference held in Singapore on 26 March. The firm last month agreed to buy fellow developer Poseidon Nickel's concentrator plant in Western Australia as it seeks to retrofit it for lithium processing. MinRes' Mount Marion site saw higher output, driven by higher plant utilisation and improved ore recoveries as the firm continues to advance its plant improvement initiatives. The realised price for spodumene concentrate out of its Mount Marion site was at $718/dmt on a 4.2pc-grade basis, which was above the product's year-to-date fob costs of A$518/dmt ($338/dmt). The realised price translates to $1,048/dmt for 6pc-grade lithium concentrate (spodumene), said the firm. The firm did not process the spodumene concentrate produced from its Wodgina site during the quarter into lithium battery chemicals, citing "prevailing pricing dynamics", but instead resumed spodumene concentrate spot sales. The realised spodumene concentrate price at the site came in at $974/dmt on 5.6pc-grade basis, which translates to $1,028/dmt for 6pc-grade lithium concentrate (spodumene). The lithium battery chemical realised price, excluding value added tax, came in at $11,098/t. MinRes in November 2023 finalised the acquisition of the Bald Hill lithium mine from Alita Resources. January-March was the mine's first full production quarter, hence output was dragged down by limited availability of higher-grade feed, but this is expected to recover in April-June, said the firm. The realised spodumene concentrate price at the Bald Hill site was $878/dmt on 5.1pc-grade basis, which translates to $1,016/dmt for 6pc-grade spodumene concentrate. Argus -assessed prices for 6pc grade spodumene concentrate dipped to $1,080-1,180/t cif China on 23 April, from $1,100-1,200/t cif China a week earlier. Salts producers reduced spodumene bid prices because of a fall in salts prices two weeks earlier. By Joseph Ho MinRes lithium performance Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 Spodumene concentrate production (k dmt) Mt Marion (50pc attributable basis) 91 83 60 Wodgina (50pc attributable basis) 49 55 44 Bald Hill (100pc attributable basis) 30 26 NA Total 170 164 104 Spodumene concentrate shipments (k dmt) Mt Marion (50pc attributable basis) 76 86 62 Wodgina (50pc attributable basis) 64 65 49 Bald Hill (100pc attributable basis) 26 20 NA Total 166 171 111 Lithium battery chemical (t) Wodgina production (50pc attributable basis) 6,793 6,798 3,246 Wodgina sales (50pc attributable basis) 6,954 6,474 1,504 Source: MinRes MinRes previously owned 40pc of the Wodgina project, which increased to 50pc starting from 18 October 2023. Figures for Wodgina before 18 October 2023 were on 40pc attributable basis. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EV demand slowdown cuts S Korea’s LGES' profit in 1Q
EV demand slowdown cuts S Korea’s LGES' profit in 1Q
Singapore, 25 April (Argus) — South Korea's top battery manufacturer LG Energy Solution (LGES) reported significant lower revenue and profit in January-March, because of lower battery metal prices and slower electric vehicle (EV) demand. LGES' revenue in January-March fell by 23pc on the quarter and 30pc on the year to 6.13 trillion won ($4.46bn), owing to lower demand for EV pouch cells and energy storage system (ESS), with "prolonged metal price impact" affecting its average selling price. The firm reported W157bn of operating profit in January-March, but would have reported an operating loss of W32bn if it did not receive almost W189bn in US Inflation Reduction Act (IRA) tax credits. But this was still a sharp drop from W633bn of operating profit for January-March 2023. The lower revenue and a demand slowdown in the EV market led to utilisation rate adjustments that weighed on its financial performance. The firm reaped a net profit of W212bn during the quarter, which was up by 12pc on the quarter but down by around 62pc on the year, likely significantly propped up by the US' IRA tax credits. LGES said it will continue to invest despite the difficult market environment, but will "adjust" the size of its capital expenditure and execution speed "as per priority". Battery project updates LGES and automaker General Motors in early April completed the first battery shipment out of their second Ultium battery cell factory in US' Tennessee. The plant's capacity is expected to gradually expand to 50 GWh/yr, said LGES. Construction progress at the firm's battery manufacturing complex in US' Arizona is also on track, said the firm. Ramped up capacity is expected to be 53 GWh/yr, which will comprise 36 GWh/yr of 46-series cylindrical battery for EVs and 17 GWh/yr of lithium-iron-phosphate battery for ESS. LGES' 10 GWh/yr Indonesian battery production joint venture with South Korean conglomerate Hyundai Motor has also started mass production. Its battery module production joint venture with automaker Stellantis in US' Ontario, which encountered a halt in construction in May last year, will start operations in the second half of 2024. The factory has a planned capacity of 45GWh/yr and was supposed to begin operations early this year. LGES earlier this year inked a second agreement with Australian firm Wesfarmers Chemicals, Energy and Fertilisers for lithium concentrate supply. The firm will continue building a raw materials supply chain within regions that have a free trade agreement with US, it said. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more