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India, Russia to cooperate on coking coal

  • Spanish Market: Coking coal
  • 16/07/21

India and Russia have agreed to a cooperation on coking coal, a move that will "benefit the entire steel sector by reducing their input cost", the Indian government said on 14 July.

"The activities involved in the cooperation are aimed at diversifying the source of coking coal," the Indian government said but did not provide further specifics on the nature of the cooperation.

India's coking coal imports stood at 25.05mn t in January-May, up by 36pc on the year, with domestic steel production recovering from the effects of Covid-19 last year. Import volumes retreated in May on high fob Australia metallurgical coal prices and sporadic lockdowns in India from the second Covid-19 wave that hit the country towards the end of March.

The Argus premium low-volatile hard coking coal index stood at $210.35/t on 15 July, compared with $109.80/t on 16 July 2020.

India imported 76,000t of coking coal from Russia in May, up by 125pc on the year. January-May imports from Russia stood at 468,000t, up by 10pc on the year.

India's crude steel output rose to 8.52mn t in May, up by 3pc from April and by 36pc from May 2020.


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27/11/24

Australia's BOM forecasts severe cyclone season

Australia's BOM forecasts severe cyclone season

Sydney, 27 November (Argus) — Australia's Bureau of Meteorology (BOM) expects the country to experience 11 tropical storms over the next few months, threatening the country's mineral-rich Pilbara region and coal infrastructure in Queensland. The number of storms is in line with historical averages, but BOM warns that rising ocean temperatures could increase their severity. The state weather agency believes that four of these storms will make landfall from late December, and that a La Nina event could start later this year, although it may not last very long. La Nina events are associated with high levels of cyclonic activity. BOM's forecasts suggest that five of the storms are likely to form around Western Australia's mineral-rich Pilbara region, which houses more than 40 operating iron ore mines and two lithium mines. Over the last three months, sea surface temperatures around Pilbara have exceeded historical averages by 1.2–2°C, warming more than in any of the country's other cyclone-prone regions. On the other side of the country, four tropical storms could form around Queensland's cattle and coking coal producing regions, although these are likely to be less severe than the Pilbara storms. Temperatures across most of Queensland are forecast to exceed historical averages by 0.4–1.2°C in October-December. Cyclonic weather in Pilbara could disrupt iron shipping and mining activity in the region. Australia's three largest iron export ports sit along the region's coast. In 2019, Cyclone Veronica forced the closure of Pilbara's three major ports and multiple mines operated by mining company Rio Tinto, prompting the firm to cut its production forecasts for the year. Harsh storms in Queensland have previously damaged vital coal transport links in the state, hampering exports. In 2017, Cyclone Debbie damaged rail lines linking coal mines to the ports of Gladstone, Hay Point, Dalrymple Bay, and Abbott Point, which handle most of the state's coking coal exports. More recently, severe weather also halted deliveries to Mackay port . Queensland and Pilbara are also home to major LNG terminals at Dampier and Gladstone ports that sit within cyclone-prone zones. The two terminals together export over 3mn t/month of LNG . By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US’ Peabody to buy Anglo’s Australian met coal assets


25/11/24
25/11/24

US’ Peabody to buy Anglo’s Australian met coal assets

Singapore, 25 November (Argus) — US coal producer Peabody Energy has agreed to acquire the bulk of coking coal assets that UK-South African mining firm Anglo American is seeking to divest as it exits the coal sector. Peabody plans to buy Anglo's majority stakes, at up to $3.8bn, in four metallurgical coal mines — Moranbah North, Grosvenor, Aquila and Capcoal — located in Australia's Bowen Basin, with the transaction expected to close by mid-2025 and subject to customary closing conditions, the producer said in a statement. With the acquisition of coal mines, Peabody's combined US-Australia production will rise from 10.6mn short tons/yr at present, to an estimate of 11.3mn st/yr (10.25mn t) by 2026, according to Peabody, strengthening the producer's position in the premium hard coking coal (PHCC) market. Moranbah North, Grosvenor and Aquila are PHCC mines, while Capcoal produces a combination of PHCC, pulverised coal injection (PCI) and other coal grades. At present, Australian low volatile hard coking coal, or tier-2 coking coal, accounts for 55pc of Peabody's 7.4mn st in coking coal sales, but the acquisition of new assets will bring PHCC's share up to 51pc and reduce its tier 2 coal to 24pc. Peabody also produces high volatile A coal in the US, accounting for 12pc of sales this year. In addition to the sale of assets to Peabody, Anglo has agreed to sell the Dawson mine in Central Queensland to Indonesian mining company PT Bukit Makmur Mandiri Utama (BUMA) for $455mn. Earlier this month, Anglo agreed the sale of its 33pc share of the Jellinbah Group coking coal joint venture to partner Australia-based Zashvin at $A1.6bn ($1.04bn). In May, Anglo announced plans to exit its coal, platinum, nickel and diamond businesses shortly after rejecting repeated takeover bids from Australian resources firm BHP. These deals come against a backdrop of a challenging price environment for steel making and subsequent weakness in coking coal prices, implying tight margins for coal producers. After reaching a high of $336.50/t fob Australia, the premium low volatile coking coal fell steadily throughout this year to reach $176.50/t in September, before recovering to remain in the $201-208/t range for most of November. In addition to a less than friendly investment climate for coal projects, Australia's Queensland state and New South Wales (NSW) state governments increased royalties on coal sales in 2023 and 2024 respectively, putting further strain on Australian miners already facing inflationary pressure from wages, equipment and fuel costs. Lower coking coal prices this year have translated to reduced royalty payments, but have yet to stem the tide of consolidations and asset sales as mining companies exit the sector. In August, Australia-based diversified metals producer South32 completed the sale of its Illawarra coking coal operations in NSW to an entity owned by Singapore-based Golden Energy and Resources (Gear) and Australia's M Resources for $1.65bn. In the US, rising mining costs and weak seaborne prices for most of this year led to the closure of smaller high-cost operations and mergers such as that of Arch Resources and Consol Energy to form Core Natural Resources , expected to close by the first quarter of 2025. In July, trading firm Glencore completed its acquisition of a majority stake in Elk Valley Resources, the coking coal division of Canadian mining firm Teck Resources, growing the former's thermal and coking coal production to 130mn t/yr. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US railroad-labor contract talks heat up


04/11/24
04/11/24

US railroad-labor contract talks heat up

Washington, 4 November (Argus) — Negotiations to amend US rail labor contracts are becoming increasingly complicated as railroads split on negotiating tactics, potentially stalling operations at some carriers. The multiple negotiating pathways are reigniting fears of 2022, when some unions agreed to new contracts and others were on the verge of striking before President Joe Biden ordered them back to work . Shippers feared freight delays if strikes occurred. This round, two railroads are independently negotiating with unions. Most of the Class I railroads have traditionally used the National Carriers' Conference Committee to jointly negotiate contracts with the nation's largest labor unions. Eastern railroad CSX has already reached agreements with labor unions representing 17 job categories, which combined represent nearly 60pc of its unionized workforce. "This is the right approach for CSX," chief executive Joe Hinrichs said last month. Getting the national agreements on wages and benefits done will then let CSX work with employees on efficiency, safety and other issues, he said. Western carrier Union Pacific is taking a similar path. "We look forward to negotiating a deal that improves operating efficiency, helps provide the service we sold to our customers" and enables the railroad to thrive, it said. Some talks may be tough. The Brotherhood of Locomotive Engineers and Trainmen (BLET) and Union Pacific are in court over their most recent agreement. But BLET is meeting with Union Pacific chief executive Jim Vena next week, and with CSX officials the following week. Traditional group negotiation is also proceeding. BNSF, Norfolk Southern and the US arm of Canadian National last week initiated talks under the National Carriers' Conference Committee to amend existing contracts with 12 unions. Under the Railway Labor Act, rail labor contracts do not expire, a regulation designed to keep freight moving. But if railroads and unions again go months without reaching agreements, freight movements will again be at risk. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Anglo American 3Q iron ore output up, met coal down


24/10/24
24/10/24

Anglo American 3Q iron ore output up, met coal down

London, 24 October (Argus) — UK-South African mining firm Anglo American boosted iron ore production on the quarter and year in July-September, driven by record output from Brazil's Minas-Rio facility. But coking coal output was down after a fire at Australia's 5mn t/yr Grosvenor mine in late June. Anglo American's 2024 iron ore production guidance is unchanged at 58mn-62mn t. Overall Anglo American iron ore output increased by 2pc on the year, as an 11pc rise at Minas-Rio offset a 3pc decline at South Africa's Kumba site. The drop at Kumba was attributed to a change in a third party's logistical capacity. Realised prices were 3pc below the market benchmark at Minas-Rio, which the firm attributes to a large volume of sales being priced on a provisional basis. Iron ore from Kumba averaged a 64pc Fe content and priced 4pc above a 62pc Fe fines benchmark. Anglo American's 2024 coking coal production guidance remains 14mn-15.5m t, after July's downward adjustment . Third-quarter output was down by 6pc on the year, at 4.1mn t, after the fire at Grosvenor in June . Third-quarter production at other sites rose by 3pc on the year. January-September output was 8pc up on the year, at 11.2mn t. Coking coal sales fell by 7pc to 4mn t following the drop in production. Pricing was comparable to index levels at $253/t, the company said, an improvement from the 93pc year-to-date price realisation. Damage at Grosvenor was less severe than expected, Anglo American said, and the firm aims to sign an agreement covering the sale of its coking coal assets in the next few months. Australian coal producer New Hope , Chinese-owned Australian producer Yancoal and Australia's M Resources are among those interested in Anglo American's five Queensland coking coal mines. By Austin Barnes Anglo American Q3 2024 results Q3 2024 Q2 2024 ±% Q2 2024 Q3 2023 ±% Q3 2023 Iron ore output Total 15.7 15.6 1.0 15.4 1.0 Kumba 9.5 9.2 3.0 9.2 -2.0 Minas-Rio 6.3 6.4 -2.0 5.6 5.0 Iron ore sales Total 15.2 16.5 -8.0 14.7 -1.0 Kumba 8.8 9.7 -9.0 8.9 -2.0 Minas-Rio 6.4 6.4 -7.0 5.9 3.0 Anglo American Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

CSX forecasts softer 4Q rail demand


17/10/24
17/10/24

CSX forecasts softer 4Q rail demand

Washington, 17 October (Argus) — Eastern US railroad said it expects that fourth quarter commodity market conditions will be mixed, limiting some freight demand. "Going into the fourth quarter, near-term conditions look modestly more challenging," chief executive Joe Hinrichs said on Wednesday. But the railroad expects "modest volume growth", supported by a few segments including chemicals and agriculture. But lower locomotive fuel prices and the impact of international coking coal prices, which are linked to export rail contracts, could drive a decrease in total revenue during the fourth quarter. He estimated that impact at roughly $200mn compared with last year's fourth quarter revenue of $3.68bn. CSX expects to see a carryover of year-over-year momentum in chemicals, agriculture and food, forest products and minerals, while metals and automotive will continue to be challenged. Demand for metals shipments is predicted to soften through the end of the year. Interest in shipments, particularly steel, is soft because of "sluggish demand, ample supply and low commodity prices", chief commercial officer Kevin Boone said. A weaker-than-anticipated automotive market contributed to the drop in metals demand. Consumer demand for automotive products has been reduced by high retail prices and interest rates, which has led to increased dealer inventories and slower production, Boone said. But CSX expects that an "interest rate easing cycle will help these markets normalize," Boone said. Metals and equipment volume fell in the second quarter, primarily because of lower steel and scrap shipments. Shipments of metals and equipment fell by 9pc to about 64,000 carloads compared with the same three months in 2023. Revenue dropped to $208mn, down by 8pc from a year earlier. Automotive volume dropped in the second quarter because of lower North American vehicle production, CSX said. Automotive traffic fell to 301,000 railcars loaded, down by 2pc from the third quarter 2023. Automotive revenue dropped to $98mn, down by 3pc compared with a year earlier. The outlook for fertilizer shipments is mixed following the third quarter as a decline in long-haul phosphates shipments persisted. Volume was negative, but the railroad was able to haul some profitable spot shipments. Shipments of fertilizer fell to 45,000 carloads in the third quarter, down by 4pc from a year earlier. Fertilizer revenue dropped to $118mn, down by 5pc from a year earlier. CSX expects growth in some market segments. Chemicals freight demand is expected to continue growing following "consistent, broad strength across plastics, industrial chemicals, LPGs, and waste. That demand helped boost chemicals volume by 9pc compared with a year earlier. Chemicals revenue rose to $727mn in the second quarter, up by 13pc compared with a year earlier. Agricultural and food products shipping demand is expected to continue growing, led by demand for grain and feed ingredients from the Midwest for supplies. That follows a third quarter when higher ethanol shipments, as well as increased overall volume helped raise volume by 9pc from the third quarter of 2023. Revenue from shipping agricultural and food products rose to $416mn, up by 11pc from a year earlier. CSX expects intermodal growth to continue with the trucking market falling, which would help drive more container freight to rail. Intermodal shipments are goods shipped in containers and trailers between different modes of transportation. The 1-3 October strike by the International Longshoremen's Association (ILA) did impact intermodal traffic, but the railroad was pleased with the "relatively quick short-term solution", Boone said. International intermodal volume during the third quarter rose because of higher east-coast port traffic. Domestic volume was mostly flat. Overall intermodal volume during the quarter increased by 3pc compared with a year earlier. But lower revenue per container helped reduce total intermodal revenue by 2pc to $509mn. CSX does not expect a major shift in coal volume through the end of the year as coal markets seem relatively stable and utility stockpiles are sufficient, Boone said. Rising natural gas prices are also unlikely to stimulate a "near-term step-up in volumes". Export coal demand has been consistent lately, particularly from buyers in Asia. But revenue per railcar for export coal could make a modest single digit drop, as contracts are tied to international coal benchmarks and prices fell earlier this year. Expport coal voume rose to 11.1mn short tons (10.1mn metric tonnes) in the second quarter on higher demand for thermal and coking coal. But domestic coal deliveries fell to 10.2mn st, down by 12pc from a year earlier, on lower deliveries to power plants and lake and river terminals. Rail coal volume fell by 2pc from a year earlier, while revenue dropped by 7pc to 553mn st. Total CSX profits rose to $894mn, up by 8pc compared with third quarter 2023. Revenue increased to $3.6bn, up by 1pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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