Atlantic coking coal prices strengthened this week, buoyed by trading firms and suppliers raising their price expectations, spurred on by Australian supply tightness and the latest higher-priced deals in Asia-Pacific.

Argus' low-volatile assessments rose by $3/t to $177.50/t fob US east coast and by $2.50/t to $182.50/t fob Alabama, with suppliers indicating firmly higher in the segment, although firm transactions have yet to emerge. The high-volatile A and high-volatile B fob Hampton Roads assessments climbed by $2.50/t to $175/t and $162.50/t, respectively, on the back of a wider recovery of market sentiment. But most US producers remain largely covered for the next quarter and fresh offers are limited. Still, market participants said they found pockets of demand in India and Latin America.

A Brazilian steel mill came out with a new tender this week for 70,000t of low-volatile coking coal for June-July loading.

An Alabama-based producer said he would offer his low-volatile coking coal at the Australian premium low-volatile price if he had availability. Another key US producer's availability is limited to only a couple of holds for the second quarter. Argus' premium low-volatile fob Australia assessment rose by $2.90/t from last week to $190.15/t today.

Trading firms in the Asia-Pacific region bid up Australian low- and mid-volatile prices over the past month, speculating on further supply tightness in response to temporary mine closures in the country. Glencore today said it had suspended operations at its Oaky Creek mine after surface water flooded into a "non-production area of the mine". The producer did not provide a timeline for the mine's recovery. This follows Anglo American's closure of its Moranbah North mine at the end of March after a possible fire and Australian producer GM3 suspending work at its Appin mine a week later, citing a roof collapse that injured four workers. GM3 reopened the Appin site this week.

While incremental demand in the Atlantic has been slow to emerge from these mine closures, the latest freight surcharges on Chinese-built vessels might lessen their freight advantage over Asian buyers when it comes to US coal. "Our view is that the Atlantic is going to have to raise [their price expectations] to compete for these tonnes," a US supplier said. Prices in the Atlantic typically have been much more attractive, he said, but new offers in Asia-Pacific largely make up for the additional freight costs.

The US Trade Representative (USTR) at the end of last week announced a new policy targeting Chinese-built vessels. Chinese ship operators will be charged $50/net tonne (nt) and Chinese-built vessels will be charged $18/nt upon arrival at US ports, the USTR said.

But the USTR exempted vessels of 80,000 deadweight tonnes (dwt) (72,574t) from the final policy, meaning many coking coal shipments could avoid the sharp increase in freight rates. The policy will come into effect after a 180-day grace period for vessels of above this limit.

Buyers were deeply concerned by the policy, US suppliers said, and many refused to close long-term deals until the USTR published the final details.

The US government body has floated several proposals since the start of this year, including surcharges of $500,000-1.5mn per port of call for Chinese-built ships docking in the US and possible additional charges proportional to the number of Chinese-built ships in operators' fleets.

Met coke

Atlantic met coke suppliers found few opportunities this week. Colombian suppliers, briefly supported by a surge of Indian buying interest, this week said the country's enquiries had come to a halt.

Brazilian steel mills, typically the main customers of Colombia's met coke industry, also stayed out of the market.

"Brazil is only buying Indonesian and Japanese met coke," a Colombian producer said.

Polish suppliers had few tonnes to offer as weak domestic coking coal output continued to weigh on met coke production.

The Argus 64 CSR fob Colombia met coke assessment kept flat at $222.50/t, as did the 64-65 CSR cif ARA met coke assessment at $247.50/t with market conditions little changed.