US coking coal export prices remained under pressure from subdued spot demand in certain key markets, while a further slight downturn in Asia-Pacific also contributed to weaker sentiment.
The Argus daily fob Hampton Roads assessment for low-volatile coking coal fell by 50¢/t to $180.50/t. The daily fob Hampton Roads indexes for high-volatile type A (HVA) and high-volatile type B (HVB) also eased by 50¢/t to $195.50/t and $159/t, respectively.
A trader confirmed he is still looking to place a small cargo of HVA from an Alabama-based mine, having first offered it a few weeks ago. The cargo is being offered at a significant discount to HVA indexes owing to high sulphur content, but demand is so sluggish, particularly in Europe, that it is yet to find a buyer.
European activity is slow at the moment as the steel outlook continues to weaken and summer approaches. Mills are accepting their contracted volumes but not taking much on a spot basis, and those sellers "that have spot cargoes to offer are willing to offer discounts", a European market participant said.
"It has been getting more difficult to place cargoes lately," another participant said, adding that coking coal has now become a "buyers' market".
Brazilian mills' coking coal requirements are largely covered after a recent spate of buying. A metallurgical coke tender has also been under discussion, with a Brazilian mill seeking 700,000t for delivery over a 12-month period beginning in September. No deal had been heard by the time Argus went to press.
US coking coal exporters are largely focused on sales to Asia-Pacific, with India still seen as a growth area and some Japanese buyers also engaging in talks. A supplier said he is in negotiations with a Japanese buyer to sell a Capesize vessel of US low-volatile coking coal. The material would have been suitable for sale to China, potentially at a higher price than that under discussion with the Japanese mill, but China's import tariff rules out this option, he said.
Some US producers are said to be reluctant to cut prices significantly, in part owing to robust signals in their domestic market. But these indications are becoming shakier, with the Argus US hot rolled coil index at $593.50/st ex-works Midwest today, down from a 2019 high of $710/st on 5 March.
"The US domestic outlook is not what it was," one US coking coal producer said.
Looking slightly further north, a Canadian steelmaker is offering 40,000t of met coke split across two cargoes, with an average CSR of 65. It is rare for the mill to sell any met coke and indicative of the regional steel market weakening, a market participant said, adding that it also underscores how availability of raw materials in the Atlantic region is potentially exceeding demand.
