Atlantic coking coal: Focus turns to logistics
Amid the worsening coronavirus outbreak globally, market participants have been largely sidelined by uncertainty and logistics challenges from port and mine closures. But with some spot availability still on offer for US coals and the limited spot demand, prices have faced downward pressure.
The daily Argus fob Hampton Roads assessment for low-volatile coking coal has dipped by 50¢/t to $140/t today, with any buyers across regions holding out for lower offers. The daily high-volatile type A price has moved down by 50¢/t as well, to $136.50/t fob Hampton Roads, while the daily high-volatile type B price has held steady after a sharp drop of $3/t to $126/t fob Hampton Roads a week ago.
The reaction of US miners to the coronavirus outbreak in the country has so far been mixed. Blackhawk halted mining operations for two weeks as of yesterday, citing the growing rate of coronavirus infection in the US, but the miner will continue to load shipments. Rhino Resource on 20 March also temporarily stopped production at many of its mining operations in Appalachia and Utah. But Corsa Coal restarted its operations in Pennsylvania after a decision by the state government to close all coal mining was swiftly reversed.
European mills facing reduced US supplies could potentially face supply tightness from Australia as well if the control measures are heightened and extend to mines there, said one trader.
At the same time, demand is significantly down and there is little worry in the market about supply. Following ArcelorMittal's notice of a force majeure on raw materials supplied to its European steel mills last week, expectations in the market are for more mills to follow suit in the coming weeks.
A Turkish mill is in the market to fulfil a regular spot requirement and is heard to be receiving bids for mid-vol Colombian coking coal at very competitive levels of well below $130/t fob. Despite some early market concerns, most Turkish mills continue to operate at their usual levels, but with capacity cuts for some at no more than 10pc. The Argus-assessed Colombian coking coal price is down by $5.60/t on the week to $133/t fob today.
But European mills are confronting considerably reduced steel offtake, and with a string of blast furnaces across the region lined up to be shut down or idled shortly by major mills, sentiment this week is decidedly sombre. Still many coking coal suppliers are comforted by the expectation that most mills still intend to keep their coke batteries running for now to avoid the high costs of shutdowns.
Several participants estimate that coke batteries have the flexibility to produce at 70pc of full capacity but no lower, much like they did during the financial crisis of 2008.
The potential increase in coke inventories may also lead to storage challenges as thermal coal stocks at ports remain quite high following a mild winter, said one European trader. Another participant said that there has been "fierce competition" between Russian coking coal producers to sell into China since European customers have been less willing to buy, and that a similar dynamic can be expected once the coronavirus crisis in Europe has passed.
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Liberty Merchant Bar to be 'mothballed', sources say
Liberty Merchant Bar to be 'mothballed', sources say
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Global battery installation growth slows in 1Q: SNE
Global battery installation growth slows in 1Q: SNE
Singapore, 7 May (Argus) — The growth of global electric vehicle (EV) battery installations during January-March this year has slowed with stuttering global EV demand, data from South Korean market intelligence firm SNE Research show. Global EV battery installations during the first quarter rose by around 22pc from a year earlier to 158.8GWh compared with 36pc growth for the same period last year. Most top battery manufacturers have experienced lower growth rate ( see table ), with Japan's Panasonic and South Korea's SK On installing fewer batteries compared with a year earlier. China's Contemporary Amperex Technology (CATL) and BYD continue to spearhead the growth, albeit also at a slower pace. Consumers' preference for battery EVs globally waned as plug-in hybrid EV and hybrid EVs growth gained momentum because of factors including continued high interest rates and a shortage of charging infrastructure, according to SNE. Samsung SDI earlier this year pinned its hopes on a gradual EV battery market recovery in this year's second half when it expected benefits from lower interest rates starting to be realised. Lower interest rates could spur consumers spending and business investment. But US Federal Reserve policymakers earlier this month signalled that they are likely to hold rates higher for longer until they are confident inflation is slowing "sustainably" towards the 2pc target. The higher interest rates and lower residual values of EVs given price cuts on new vehicles could push up EVs' monthly leasing terms, which are often financed, according to Dutch investment bank ING's senior economist Rico Luman and senior high yield credit strategist Oleksiy Soroka. The scaling back of subsidies in Germany will also weigh on EV uptakes, they said. The IEA has forecast that EV sales will continue to grow in most major markets this year but at a slower rate compared with 2023. Global EV sales this year are forecast to top 17mn, more than 20pc of total global vehicle sales. By Joseph Ho Global EV battery installations (GWh) Jan-Mar '24 Jan-Mar '23 1Q '24 y-o-y % ± 1Q '23 y-o-y % ± CATL 60.1 45.6 31.9% 32.9% BYD 22.7 20.3 11.9% 103% LGES 21.7 20.1 7.8% 43.6% Panasonic 9.3 10.6 -12.6% 21.8% Samsung SDI 8.4 6.2 36.3% 44.2% SK On 7.3 7.9 -8.2% 17.9% CALB 6.3 5.2 22.2% 26.8% EVE 3.6 2.3 54.7% 64.3% Guoxuan 3.4 2.7 22.1% 3.8% SVOLT 2.7 0.9 217.7% NA Others 13.4 8.4 59.2% NA Total 158.8 130.2 22% 35.8% Source: SNE Research 1. Calculated 1Q '23 growth rate using SNE Research adjusted figures 2. Used SNE Research 1Q '24 growth rate figures 3. Omitted 1Q '23 growth rate figure for "others" given SVOLT's likely in the list (making it an inaccurate comparison) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Daihatsu fully reopens domestic auto operations
Japan’s Daihatsu fully reopens domestic auto operations
Tokyo, 7 May (Argus) — Japanese car manufacturer Daihatsu resumed operations at Kyushu and Osaka on 6 May and 7 May respectively, marking the full reopening of its domestic plants. Daihatsu produces around 400,000 units/yr and 6,000 units/yr at Kyushu in south Japan and Osaka in west Japan respectively, according to a company representative that spoke to Argus. Combined production at these two plants accounts for around half of its total domestic output. It suspended all its operations in December 2023 after it was accused of tampering with safety test results. Daihatsu partially resumed operations in February and March but the Kyushu and Osaka plants remained closed. The company's March output fell by 65.8pc from a year earlier to 30,453 units , although it recovered from 6,692 units and none in February and January respectively. The country's overall industrial production index increased by 3.8pc from the previous month, according to the ministry of trade and industry last week, mostly driven by a production recovery of passenger vehicles. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil unlocks relief spending to flooded state
Brazil unlocks relief spending to flooded state
Sao Paulo, 6 May (Argus) — Brazil's president Luiz Inacio Lula da Silva signed a decree to ease relief spending to Rio Grande do Sul state, which has been hit with historically heavy rainfall and floods. "We are going to do everything in our power to contribute to Rio Grande do Sul's recovery," he said today after signing the decree, adding that was only the first of "a large number of acts" for the state. The decree recognizes the state of emergency in Rio Grande do Sul and allows the federal government to grant funding and tax waivers to the state without having to comply with spending limits. In addition, it makes rules for public authorities to contract services and purchase products more flexible. The decree still needs both senate and congressional approval — which should be hasty, as both the senate and house leaders were present at the decree's signing. It is still not clear how much money it will take to rebuild the state, chief of staff Rui Costa and planning minister Simone Tebet said. But the minister of regional integration Waldez Goez estimated that it will take around R1bn ($200mn) to rebuild the state's highways. Rio Grande do Sul has been hit with heavy rainfall since 29 April. The highest volumes reached the central areas of Rio Grande do Sul, with cities receiving rainfall of 150-500mm (6-20 inches), regional rural agency Emater-RS data show. The monitoring station of Restinga Seca city, in the center of the state, recorded rainfall of about 540mm. Rainfall in Rio Grande do Sul overall surpassed 135mm in most of the state, according to the US National Oceanic and Atmospheric Administration (NOAA). State capital Porto Alegre is expected to receive more rain later this week, according to Rio Grande do Sul-based weather forecaster MetSul. MetSul warned that parts of the Porto Alegre metropolitan area could remain uninhabitable for weeks or months. The floods have left at least 83 dead and 111 missing, according to the state government. An additional 130,000 people have been displaced from their homes. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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