Atlantic coking coal: Prices flat on limited 3Q buying
While a string of plant restarts for automakers have taken place or are planned across Europe, the overall outlook for coking coal demand in the region for the third quarter remains largely muted. But prices have continued to hold up as US producers sitting on smaller inventories compared with earlier this year appear less ready to offer heavy discounts.
The Argus daily assessed US low-volatile fob Hampton Roads is unchanged today at $110/t, as were the high-volatile A price at $114/t fob Hampton Roads and high-volatile B price at $106/t fob Hampton Roads.
"We don't expect a quick recovery in hot metal demand and have even reduced our coke plant output for the third quarter from 80pc to 70pc," said one European mill source. "I certainly don't hear of any mills even thinking about restarting idled blast furnaces this year."
The temporary mine closures earlier this year due to safety concerns over Covid-19 have taken the pressure of high inventories off some US miners in recent weeks. It remains to be seen if further pockets of spot buying will emerge in Europe for the rest of the third quarter or if US miners might even start to encounter competition from Australian producers facing potential restrictions on exports to China.
The tightening of Chinese import restrictions on Australian coal has caused some confusion among market participants. "It's not good for the market, I see it as a paradox. The less they have in quotas, the more buyers will want the high-grade Australian coals. China wants good materials, and quota reductions normally work against Russian grades," said a trader.
Some US suppliers have expressed fears that Chinese import restrictions on Australian coking coal could lead to Australian sellers taking larger shares of other markets outside of China, although some are doubtful. "China and the rest of the world are separate markets," said a Turkish mill. "We hope that there'll be more Australian tonnes in the market, but it would have to be at a lower price. Australian prices are currently too high for Europe, but it also depends on your requirements."
Suppliers have also noted that while there were a couple of enquiries in the last few weeks from European mills, it might have been a price-checking exercise for some.
Scepticism remains in the market despite discussions being heard between miners and mills. "Europe is quiet because mills are taking the deliveries they delayed last month," said a European trader.
A mill seeking third-quarter PCI is in discussions with a Russian producer for PCI in the region of $60/t cif Europe, in line with the Argus assessment of $61.30/t cif Rotterdam and $60.30/t cif Rotterdam on Tuesday for low-vol and mid-vol PCI, respectively.
A cargo of Colombian coke was heard traded at $190/t cif Rotterdam and is en route for June delivery.
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US met coal suppliers expect belated supply tensions
US met coal suppliers expect belated supply tensions
London, 3 May (Argus) — US coking coal prices have so far brushed off any impact of the collapse of the Francis Scott Key bridge in Baltimore on 26 March and the subsequent disruption of vessel traffic via the Port of Baltimore. Suppliers such as Arch Resources and Blackhawk that utilise the Baltimore shipping route have sought effective alternative arrangements so far and buyers have been largely comfortable despite some delays in laycans. Other suppliers such as Northern Appalachia's largest producer, Consol Energy's Bailey mine , which is a key supplier to Atlantic end-users, have faced more challenges, market participants suggest. The decline in fob Australia coal prices from last year's highs amid improved supply availability has also weighed on prices. The Argus assessed premium low-volatile coking coal fob Australia price was at $242.80/t on 3 May, largely unchanged from $254/t on 26 March after reaching a low of $224/t on 8 April. The US east coast prices have followed a similar trajectory, with low-volatile fob US east coast at $215/t today down from $220/t on 26 March after falling to a low in April. Low European demand has been one of the reasons behind the tepid response to coking coal shipment delays from the US. But with expectations of at least some recovery in the second half of 2024 and still no firm date on when the Baltimore traffic will return to normal, some US suppliers suggest coking coal prices may face some upward pressure later this year. Luxembourg-based steelmaker ArcelorMittal has kept its apparent steel demand outlook in Europe unchanged for 2024, expecting a growth of 2-4pc on the year . European steel association Eurofer downgraded its apparent steel consumption outlook for 2024 again , to 3.2pc from a previous forecast of 5.6pc, owing to worsening geopolitical tensions, economic uncertainty, energy prices, inflation and higher interest rates. But this would still be an improvement from a 9pc fall in steel consumption in 2023. There is also optimism among US coal suppliers that Brazil may be a source of renewed demand in the coming months with domestic steel production expected to improve. The Brazilian government is due to increase taxes for some imported steel products after facing pressure from the domestic steel industry to apply tariffs on imports, in particular on Chinese steel. Taxes will be increased to 25pc on 11 steel products — mainly flat rolled — contingent on such import levels exceeding prescribed quotas, the trade ministry's committee on foreign commerce, Gecex/Camex, said. Brazil's crude steel output reached 31.9mn t in 2023, down by 6.5pc on the year, World Steel Association data show. In the US, the fall in seaborne met coal prices also points to potential consolidation in the sector and the possibility of supplies tightening down the road. Industry participants highlight that some of the small and mid-sized mining operations that have emerged in the past two years amid a strong price environment are struggling. Bens Creek Group, which operates the Bens Creek Mining project in West Virigina with around 30,000-35,000st (27,200-31,800t) per month of coking coal output, filed for Chapter 11 bankruptcy in April. The year-to-date average price of high-volatile A for 2024 stands at $242.62/t fob Hampton Roads and is estimated to be above production costs for some of these mines. In 2022, high-volatile A prices averaged $347.81/t fob Hampton Roads, driven by a combination of market concerns over the Russia-Ukraine conflict and supply disruptions in Australia. While Russian coking coal remains available and competitively priced in the market, in particular a key supply source for China, US sanctions will continue to put pressure on major coal importers such as India and South Korea to reduce their Russian imports. The US announced fresh sanctions against Russian coal producer Sibanthracite's group of companies earlier this week. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth nearly halved in April
US job growth nearly halved in April
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UK decoiler Atlantic Steel enters administration
UK decoiler Atlantic Steel enters administration
London, 3 May (Argus) — Birkenhead-based decoiler Atlantic Steel filed for administration yesterday, according to a filing seen by Argus . The company has been under pressure since its previous owners took a large chunk of cash out of the business as part of a management buyout in 2022. Credit insurers began to pull cover on the business towards the end of last year, and suppliers have been calling retention of title, which protects suppliers in the event of insolvency or bankruptcy, in recent days. Sources suggest the debt of the business at the time of administration is around £18mn. The previous owners are preferential creditors after the banks, as they were due another £5mn from the business, according to Companies House filings. Market sources suggest it is likely the business will be bought out of administration, with other service centres interested in the assets — the lease on the site expires in the next few years but is extendable, and Atlantic operates the largest decoiler in the UK, capable of decoiling over 2.5m wide. It is also situated on the dock at Birkenhead, which cuts inland transportation costs. The UK HRC market has been under pressure for a number of months, in line with the struggles seen in Europe. Argus ' weekly assessment was £605/t ddp West Midlands on 2 May, down from a recent peak of £700/t at the start of February. The assessment reached an all-time high of £1,200/t on 31 March 2022, and the management buyout took place later that year. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Italian flat steel trading at premium on low supply
Italian flat steel trading at premium on low supply
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