China allows some Australian coking coal to unload
Eight vessels of Australian coking coal will be allowed to discharge at Jingtang and Caofeidian ports in north China, in what is likely a humanitarian move but has raised hopes for an end to China's ban.
The vessels do not have customs clearances, but the discharging of the coal at port will allow the crew to go home after waiting for as long as seven months offshore.
"We checked with one of the shipowners and they confirmed to have received such notification abruptly," a Chinese trader said. "These cargoes are indeed to be discharged, although the reason remains unclear. "
China imposed an informal ban on Australian coal imports last October, after unloading delays worsened mid-year.
Five vessels at Jingtang port CHS Creation, Hong King, Jag Anand, Navios Coral and Ping May — a mix of Panamax and Capesize ships — will discharge a total of 567,000t, sources indicated. A total of 850,000t on eight vessels will discharge at both Caofeidian and Jingtang ports, Chinese sources said.
"It is still not known whether they will be given clearance for customs or simply discharged into a bonded warehouse in an effort to release the vessel and the crew members onboard," an Indian trader said, adding that all five vessels have been stranded since they arrived at the port between mid-June and mid-July last year.
The Indian vessel Jag Anand brought attention to health concerns for the crew members when it changed crew in Chiba, Japan, late last year before rejoining the Jingtang flotilla.
Tier-one coking coal import prices fell by $1.85/t from yesterday to $216.15/t cfr China following the news today, as any hint that China might ease its ban on Australian coal imports would free importers from limited options from Canada and the US now.
"It is still early to say now. The recent discharge likely accounts for those vessels that arrived before the informal ban, effective from October. It is worthwhile to see whether the interest to resell cargoes will reduce from here on," a Singapore-based trader said.
Others said the discharging of these vessels could be a one-off event — similar to the South Korean crew returning home late last year after unloading its coal — given the strained Australia-China relationship.
Around 3mn t of Australian coking coal is waiting to unload at the two ports or be resold to other markets. Market participants reported a significant amount of resale offers across coals in the premium low-volatile, premium mid-volatile and second-tier segments. Australian export prices will gain support if resale interest declines, as an end to the ban will pull imports into China and reduce overall supply in the market.
Related news posts
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
Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth fell, signs of gradually weakening labor market conditions. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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
London, 3 May (Argus) — Italian coil prices are trading at an atypical premium to northwest EU prices, especially for downstream products such as cold-rolled coil (CRC) and hot-dipped galvanised (HDG) coil. Multiple factors are playing into the current trend, which several producers say is unlikely to be sustainable given higher costs for northwestern mills — most notably, the comparatively brighter economic picture in southern Europe compared with the north, and lower steel output in Italy. Germany manufacturing PMI data has been consistently below Italian levels since August 2022, and registered its last monthly growth nearly two years ago in June 2022. Italian manufacturing has expanded in five months over the same period, registering its last increase in March 2024. In recent years, German manufacturers have been buffeted by the loss of cheap Russian energy, a reduction in demand from key export markets, most notably China, as well as the lack of investment in infrastructure and political difficulties. And yet, German hot-rolled coil (HRC) output increased by 5pc year on year in the first quarter of this year, partially driven by mill restocking, while Italian output slumped by just over 9pc in the same period. Naturally, Acciaierie d'Italia halting furnaces and producing with just one asset of 1 mn t/yr capacity plays a role in the lower overall output, but it has also been running just one rolling line at low capacity. Novi Ligure has nearly stopped, and producing depending on if stocks of raw material match customer enquiry. Financially troubled re-roller Liberty Magona has also produced intermittently and at low levels as it has struggled to obtain letters of credit, and thus only produced when able to buy HRC by paying in advance, or financed by third-parties. Producer Arvedi has taken the decision to drastically reduce or even stop offering CRC over the past year, on its inability to compete with Asian import pricing. CRC is the only major flat steel product to have not been hit by dumping duties in recent years, and weak demand in Asia saw a shift of regional mills to the EU market. Ample quota availability for CRC also meant that safeguards were not a factor, unlike for HDG. Arvedi has continued supplying HDG, and is currently one of two constant Italian suppliers of the material. The only regular supplier of both downstream products has become re-roller Marcegaglia. Again, the mill has mostly been selling CRC for very prompt delivery enquiries, unable to compete with Japanese, Korean and Indian import CRC, which have become the reference. Despite the lower volumes of CRC the producer has been selling, it has tried to maintain the historical €10-20/t differential between CRC and HDG offers, with varying success over the past months. The uncertainty of the HRC import duty on "other countries" material has likely made the producer, which relies heavily on imported coils and is one of the largest spot buyers in the world, less clear on the discounts it can provide given the varied duty it has had to pay in recent quarters. Sales opportunities in central and east Europe over the past months have also aided its order books. Transportation costs, slim margins and regional competition, as well as weak fundamentals, have kept north EU mills more focused on closer-by markets. While some sellers have been present in Italy with both CRC and HDG, they have not been undercutting Italian producers. In addition, demand for HDG has been relatively stable, while stringent safeguard quotas have not allowed Italian prices to fall under pressure from imports. EU car registrations in the first quarter were up by 4.4pc year on year, and although both Germany and Italy posted growth, the German increase was below the average rate for the bloc, while Italy was up by 5.7pc. Clearly, EU producers have offloaded some volumes of both CRC and HDG in the export markets this year, with exports of the products rising dramatically in January-February. The majority of those volumes have come from northwest EU suppliers. Of late, rising import prices have also helped southern mills more, given the quicker impact imports have on domestic prices in the south. By Lora Stoyanova and Colin Richardson HDG CRC spreads $/t Germany and Italy manufacturing PMI 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