Atlantic coking coal: Market remains under pressure
The Atlantic coking coal market remains under considerable pressure, with demand still sluggish and several sources expecting seaborne prices to drop further.
The Argus daily fob Hampton Roads index for low-volatile coking coal is down by 50¢/t today at $150/t. The daily high-volatile type A assessment is down by $1/t at $152/t fob Hampton Roads — its lowest since November 2017.
The high-volatile type B (HVB) index has also shed $1/t to reach $138.50/t fob — its lowest since April 2018.
Prices for off-spec HVB are cited in Europe as low as the mid-120s fob Hampton Roads, with some still available for third-quarter delivery. The material being referenced is of a lower quality than grades typically factored into indexes, but the low price relative to indexes indicates the bearishness of European sentiment at the moment.
Overall, demand for extra spot tonnes remains extremely limited. A northwest European mill is understood to have booked 20,000t of HVB from a regular supplier, although the deal has not yet been confirmed.
Turkish mills are conspicuous by their absence, with some time having passed since they sought top-up cargoes of coking coal, PCI or metallurgical coke, and several suppliers wondering when the next round of tenders will materialise.
Brazil is possibly generating the biggest buzz at the moment, with two steelmakers having recently issued tenders for multiple coking coal products for 2020 delivery, including PCI, met coke and anthracite.
Concerns are building about how far the current downturn might go, with the margins of coking coal producers in Russia, the US and Mozambique all said to be entering uncomfortable territory. Russian suppliers in particular are proving particularly "flexible" on pricing for coking coal and PCI, reflecting how weak demand is and also how they are prioritising cash flow generation over high prices, a trader said.
Met coke
The European met coke market is offering up occasional pockets of buying interest, although overall demand for blast furnace coke is extremely low.
Market participants note some demand in Germany, where one mill is understood to have recently booked an extra 20,000t of blast furnace coke to cover its needs until late October, after which it might be seeking another 20,000t. But these kinds of opportunities are sparse, and sellers are competing fiercely to win the business.
A western European market participant pegged prices for imported blast furnace met coke with CSR of 60+ at around $270/t fob ARA, plus or minus $5-10/t.
Polish suppliers are said to be offering blast furnace coke "a bit on the high side", as they are also taking into consideration their term contract pricing, albeit their offer levels are coming down slightly.
Some European mills continue to offer their own met coke in the merchant market. There has not been much uptake for this material through the summer, although some traders have lately confirmed occasional bookings, indicating some successful redistribution of excess tonnes across the continent.
European demand for coke breeze is fairly healthy, compared with the blast furnace and nut coke segments — to the extent that some Europeans are considering importing it from China despite quality concerns. Market participants pegged coke breeze prices at $170-180/t fob ARA depending on grade, but one added that this price range would only be viable for smaller tonnages.
Colombian prices for blast furnace coke are pegged at $275-280/t fob, and nut coke at $200-220/t fob, depending on specification.
European demand for Colombian coke is limited, in line with the broad trend, but more local opportunities are noted, with one Brazilian buyer currently seeking 360,000t of Colombian met coke for delivery over a 12-month period.
Related news posts
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.
Floods halt firms' operations in Brazil's south
Floods halt firms' operations in Brazil's south
Sao Paulo, 6 May (Argus) — Several Brazilian companies have suspended operations in the southern state of Rio Grande do Sul because of heavy rainfall that has caused severe floods and infrastructure damage. Flooding from the record rains has left at least 83 dead with 111 people missing, according to the state government. More than 23,000 people have been forced from of their homes amid widespread damage, including washed out bridges and roads across several cities. The dam of the 100MW 14 de Julho hydroelectric plant, on the Antas River, ruptured last week under the heavy rains . Power generation company Companhia Energetica Rio das Antas, which runs the plant, implemented an emergency evacuation plan on 1 May. Brazilian steelmaker Gerdau said on Monday that it suspended its operations in two mills at the state until it can ensure "people's protection and safety." The company did not disclose the produced volume of steel at those two mills. Logistics company Rumo partially interrupted operations and said that "damages to assets are still being properly measured". Petrochemical giant Braskem shut down its facilities at the Triunfo petrochemical complex as a preventive measure because of "extreme weather events" in the state, it said on 3 May. The company added there was no expected date to resume activities there. Braskem operates eight industrial units in Rio Grande do Sul that make 5mn metric tonnes/yr of basic petrochemicals, polyethylene and polypropylene, according to its website. By Carolina Pulice 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