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US coking coal output dips in 3Q

  • Market: Coking coal
  • 01/12/22

US third-quarter coking coal output fell by about 3pc from April-June, but was 1-2pc higher than a year earlier at 14.6mn st (short tons), Mines Safety and Health Administration (MSHA) data show, as weak demand signs emerged and rail delays and geological conditions held some producers back.

Russia's invasion of Ukraine coincided with suppliers lifting first-quarter output to the highest since 2019 — in response to record prices at the end of 2021 and beginning of 2022. Second-quarter output was stable.

Third-qurter exports fell more sharply, as a weak macroeconomic environment led to lower steel demand. Overall exports fell by 11.3pc from April-June to 10.51mn t, but were 2.56pc higher year on year, trade data show. For some producers, demand for coking-quality cargoes for thermal use offset weaker seaborne coking demand.

Arch's third-quarter output fell by 21.6pc from April-June to 1.71mn st because of difficult cutting conditions at its new Leer South mine. But start-up of the mine meant that the company's coking coal output was 2.4pc higher than a year earlier.

Output at the Buchanan low-volatile mine rose by 26pc from April-June to 1.19mn st, but was down by 12pc on the year.

Blackhawk's production of high-volatile coal increased by 5.3pc on the quarter and fell 8.5pc on the year to 1.48mn t.

Output at Warrior's Blue Creek 7 mine fell by 11.1pc on a quarterly basis, but was 3pc up on the year, at 1.16mn st. Production at Blue Creek 4 rose by 33.9pc on a quarterly basis to 479,867 st. Industrial action halted output in the third quarter of 2021.

Corsa's low-volatile coking production fell by 6.9pc on a quarterly basis and 12.8pc on the year to 218,937 st.

September exports increased by 9.1pc from a year earlier to 3.87mn t, driven by higher shipments to the EU, Brazil and India. Deliveries to the EU rose by over 130pc year on year to 1.49mn t, as suppliers continued to find alternatives to Russian coal. Shipments to the EU were 4.6pc higher than in the second quarter, but should dip in the next few months, given extensive cuts to blast furnace production and high metallurgical coke inventories.

US third-quarter shipments to India almost trebled year on year to 1.7mn t. Shipments to Brazil were 27.3pc higher on the year, at 1.5mn t.

Shipments to China remained depressed, at just 551,891t in the third quarter, down from 3.35mn t a year earlier.

US coking coal mines'000st
MineQ3±% 2Q±% 3Q21
Table subheader
Buchanan1,19126-12
Greenbrier374-41
Oak Grove49634-24
Beckley234-16-12
Mountain Laurel178-14-34
Leer South413-17295
Leer889-26-14
Shoal Creek21244n/a
Morgan Camp66-5-60
Affinity139-22-37
Paw Paw 2102-17-16
Blue Creek 448034n/a
Blue Creek 71,163-113
Deep Mine 415570-5
Ewing Fork No. 1224-80
Workman Creek449-20-22
Black Eagle2413670
Davy Branch2413240
Lynn Branch No. 2344-512
Rockwell453-15-7
Panther Creek5491850
Hampden125-2615
Kanawha Eagle356-21-20
Madison101-10-26
Cresson15431149
Brush Valley1621723
Crooked Creek163-28-38

Key coking coal exports in September '000t

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09/07/24

EIA raises US coal power forecast for 2024-25

EIA raises US coal power forecast for 2024-25

Houston, 9 July (Argus) — Coal-fired generation in the US is expected to be higher this year and in 2025 compared with 2023 levels in response to elevated natural gas prices, government projections released today show. Coal power will increase by 2.7pc from a year earlier to 688.5bn kWh in 2024, the US Energy Information Administration (EIA) projected in its monthly Short-Term Energy Outlook today. Coal generation in 2025 will then slip to 674.5bn kWh, which would still be slightly higher than 2023's 670.7bn kWh. The coal generation outlooks for this year and next are both above what EIA projected in June. Today is also the first time this year that EIA said it expected 2024 coal power to top 2023 levels. "After reviewing the responsiveness of fossil fuel generation to natural gas prices, we now expect more power generation from coal and less from natural gas than we did in our previous forecast, especially during the winter," EIA said. The agency projected spot natural gas prices at the Henry Hub to average $2.49/mmBtu this year, down from $2.54/mmBtu in 2023. But gas prices in the second half of 2024 will be higher than they were in both the first six months of this year and in the back half of 2023, and prices will continue to rise in 2025. The spot price at the Henry Hub will average $3.29/mmBtu in 2025, EIA projected. Natural gas-fired generation is expected to inch up by 1.4pc from a year earlier to 1,719.4bn kWh in 2024 but then slide below 2023 levels to 1,695.3bn next year, as the higher prices suppress demand for gas. EIA said overall US electricity generation was 5pc higher in the first half of 2024 than the same period last year as a result of higher-than-normal temperatures in June and rising demand from some businesses. The agency expects electric power dispatch in the second half of this year to be 2pc higher than in the same period of 2023, and for renewable power to have the greatest rate of growth during that time. Solar power is forecast to be 121.4bn kWh in the second half of this year, which would be 42pc higher than a year earlier. Wind generation is expected to rise by 12bn kWh, or 6pc, during this time to 208.7bn kWh. The greater solar and wind generation is at least partly because of more projects coming on line. EIA expects the US to have 127.3GW of solar generating capacity and 155.2GW of wind by the end of this year, compared with 90.2GW and 147.6GW, respectively, in the fourth quarter of 2023. Coal generating capacity is expected to continue to slip, to 174.3GW in by the end of this year from 177.1GW in the fourth quarter of 2023, according to EIA. Coal's portion of the nation's generating capacity mix will then drop more sharply in 2025 to 162GW as coal-fired plant retirements start to accelerate. The higher outlook for coal generation this year led EIA to raise its expectations for electric power coal consumption by 3.8pc from the agency's June outlook, to 395.5mn short tons (358.8mn metric tonnes) in 2024. That also would be higher than the 387.2mn st consumed in 2023. But US coal production is still expected to fall by 12pc this year to 509.7mn st this year. US thermal coal exports are expected to rise to 53mn st this year and to 55mn st in 2025 from 48.5mn st in 2023. EIA forecast metallurgical coal exports will be about 49mn st in 2024 and 49.2mn st in 2025 compared with 51.3mn st last year. By Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Anglo declares FM after Grosvenor coking coal mine fire


05/07/24
News
05/07/24

Anglo declares FM after Grosvenor coking coal mine fire

Shanghai, 5 July (Argus) — UK-South African mining firm Anglo American has declared force majeure (FM) on Moranbah deliveries from the fourth quarter of 2024 after its Grosvenor coking coal mine closed on 29 June. Anglo American has suspended production at its Grosvenor mine in the Bowen basin region of Australia's Queensland because of an underground methane gas ignition. The company was instructed by independent regulator Resources Safety and Health Queensland on 29 June to suspend all operations and activities underground. "These events are beyond our reasonable control and will partly or wholly prevent, hinder, or delay our ability to meet our delivery obligations of the product under the contract from the fourth calendar quarter of 2024," the company said in a letter to customers seen by Argus . The closure is expected to last for several months, depending on ongoing evaluations, according to Anglo American. At least four consumers across Asia with term contracted volumes of Moranbah North in the fourth quarter said they have received the FM notice in the late evening of 4 July. Grosvenor was expected to produce 3.5mn t in 2024. Production guidance for Grosvenor was placed at 1.2mn t for the second half of 2024, a reflection of lower production because of a longwall move scheduled in the third quarter of 2024. Supply concerns for the immediate term were alleviated when Anglo American informed several steel mills and trading firms on 3 July that it expects to meet its contracted obligations for the third quarter. Before that, the mine closure incident appeared to have initiated a string of higher trades in the paper market and prompted the sale of a 40,000t Goonyella cargo with 1-10 August laycan to a trading firm at $260/t fob Australia on 2 July. "They were planning longwall moves at Moranbah and Grosevenor during this quarter so it does make sense that they would have planned reduced sales during the same, so meeting [third quarter] commitments and declaring FM on [fourth quarter] does check out," an Australian supplier said. Many expected the mining firm to issue an FM for the fourth quarter, with one source suggesting that "running down stockpiles can only continue for so long". Consumers that received the FM notice said they were assessing the ongoing impact to their operations. It remains unclear whether the impact would be a delay or a cancellation to shipments, one consumer said. Two others said their exposure to term contracted volumes of Moranbah North with the mining firm was limited and they may seek alternative coals from markets such as Australia, Canada or Mozambique if required. Market participants agreed that a reduction in supply would likely be reflected in market prices in the longer run. "This will take 3.5mn t/yr of premium mid-volatile coal out of the market, a meaningful volume that will structurally tighten the prime coal segment," an international supplier said. "The market feels like there's an overhang of prime coals especially from Canada recently, but we don't expect that to go on for too long. When that is used up, finding alternatives might be challenging," he added. Argus assessed the premium hard low-volatile coking coal price at $255/t fob Australia on 4 July, down from a year-to-date high of $336.25/t on 12 January. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Anglo assures customers of 3Q met coal shipments


03/07/24
News
03/07/24

Anglo assures customers of 3Q met coal shipments

Shanghai, 3 July (Argus) — UK-South African mining firm Anglo American has today informed several steel mills and trading firms that it expects to meet its contracted obligations for the third quarter, Argus has learned. This follows the closure of Anglo American's 5mn t/yr Grosvenor coking coal mine in the Bowen basin region of Australia's Queensland, following an accident in late June. Anglo American is "evaluating the impact of this incident and is expecting to perform on its third-quarter obligations as planned at this moment, subject to change depending on further assessment", an Asian steel mill source said. Others said the same, with an Indian buyer stating that the company is "not expecting any material impact to supply in the short term, since the miner is expected to meet third-quarter commitments". Some sources cautioned that cargo delays are still anticipated, with one trading source expecting delays of more than 20 days. Production at Grosvenor had been strong for the past couple of months, after a challenging 2023 . The producer increased spot offers on the market in the past two months, with at least three July-loading Panamax cargoes sold and at least two Panamax cargoes being offered for August loading, before the 29 June accident. The paper market also cooled down today after sharp increases earlier this week, market participants said. Fob Australia premium futures contracts were trading at around $253-254/t and $257-258/t for July and August, respectively, on 3 July, falling by around $8-10/t from 2 July. Supply availability for the fourth quarter remains uncertain, with some market participants expecting the market to tighten in anticipation of stronger demand. "There is some demand surfacing from India this week for August and September-loading cargoes, so prices may see some support once September cargoes are being discussed, because other mines are also going to be in maintenance during that time," an international trader said. The Argus premium low-volatile hard coking coal price was assessed at $257.50/t fob Australia on 3 July, down by $2.10/t from 2 July. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Asia-Pacific coking coal: Fob trades at $260/t


02/07/24
News
02/07/24

Asia-Pacific coking coal: Fob trades at $260/t

Singapore, 2 July (Argus) — Coking coal prices on a fob Australia basis jumped after an August Goonyella deal emerged higher on traders' position-taking, against a background of anticipated supply tightness. The Argus Australian premium low-volatile (PLV) hard coking coal price rose by $22.60/t to $259.60/t on a fob basis, while the tier-two hard coking coal price rose by $18.50/t to $225.50/t fob Australia. Trading returned to the first-tier fob Australia market today after more than a week of subdued activity. A major producer sold a 40,000t Goonyella cargo with 1-10 August laycan to a trading firm at $260/t fob Australia on the Globalcoal trading platform today. The trade was in line with market expectations of tightening supply, providing a lift to coking coal prices. The suspension of operations at Anglo American's Grosvenor mine in Queensland has prompted a sharp change in market sentiment, sources noted. Sentiment had been bearish over the previous week, before taking a bullish turn when the news of the closure broke over the weekend, an India-based trader said. Several sources said the increase was on the high side, as there has been limited change in recent market fundamentals to warrant such a rise. Recent events made it challenging to gauge where the market price should be, a Singapore-based trader said, preferring to adopt a wait-and-see approach towards near-term market direction. But users in the region were largely sceptical on whether the uptrend can be sustained, suggesting that demand remained muted their end. "We don't have any urgent requirement at this point and will wait for an update from the miner before acting," an Asian steel mill source said. Several steel mill sources also pointed out that they have accounted for limited supply from the miner in August-September because of a scheduled long wall move. At least three steel mill sources expected the miner to have sufficient inventory to meet the commitments for scheduled July-loading cargoes. A bid for a 75,000t cargo of premium mid-volatile hard coking coal for 1-10 September was made at $255/t fob Australia on Globalcoal today, increasing from $250/t fob earlier in the session. It did not attract a counteroffer. In the pulverised coal injection (PCI) segment, a 40,000t cargo of Australian South Walker Creek PCI for 27 July-5 August loading was sold at $195/t fob Australia to a Brazilian steel mill on 1 July after the assessment timestamp of 17:30 Singapore time. Premium hard coking coal prices to India rose by $22.25/t to $275.35/t on a cfr basis, while second-tier prices rose by $18.60/t to $241.70/t cfr east coast India. The PLV hard coking coal price to China was unchanged at $247/t on a cfr basis today, while the second-tier price was flat at $217/t cfr north China. Market participants noted that the trade seemed to have minimal impact on the Chinese market. An international trader suggested that domestic coking coal prices held steady because of Russian and Mongolian coal availability. The link between the seaborne and domestic market has been disjointed for a while now, another trading source said, even though fob prices are expected to climb because of tightening seaborne supply. "At the current fob Australia price levels, it is difficult for Chinese buyers to consider buying imported coal since other origins of seaborne prime coals are also expected to increase at a relativity to the fob Australia price," a Chinese buyer said. Fob Australia rationale The fob Australia PLV index was based on an average of the day's deals and surveys, both weighted at 50pc in the index calculation. A 40,000t cargo of Goonyella with an August laycan traded at $260/t fob Australia and was normalised flat. The market survey was at $255-260/t and averaged $259.17/t. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Fire shuts Anglo American’s Australian coking coal mine


01/07/24
News
01/07/24

Fire shuts Anglo American’s Australian coking coal mine

Sydney, 1 July (Argus) — UK-South African mining firm Anglo American has closed its 5mn t/yr Grosvenor coking coal mine in the Bowen basin region of Australia's Queensland, after a fire broke out underground. The methane gas ignition occurred on 29 June and it is likely to take several months before the mine can restart given the damage underground, according to Anglo American. Independent regulator Resources, Safety and Health Queensland said it was assisting the firm to safely seal the mine on 1 July. Grosvenor was expected to deliver 1.2mn t of coal in July-December, down from 2.3mn t in January-June, because of a planned longwall move in the second half of 2024. Anglo American's steelmaking coal business was budgeted to produce 15mn-17mn t of coking coal in 2024 and the firm will update this guidance as more information becomes available. Anglo American is looking to exit its coal mining operations in Australia , after rejecting a takeover offer from Australian mining firm BHP. It has struggled to manage the build-up of methane from its Queensland mines over the past few years. Operations at Australia's Moranbah North mine was closed from March-May 2022, after a fatal accident raised safety concerns. The producer also stalled operations at the Grosvenor mine in May 2020 because of gas ignition issues. Argus assessed the premium hard low-volatile coking coal price at $234/t fob Australia on 28 June, down from a year-to-date high of $336.25/t on 12 January. By Jo Clarke Australian metallurgical coal prices ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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