Canadian met coal displaces US in May

Canadian coking coal mining firms offered lower-priced cargoes into India in May — seeking a new market to offset a sharp drop in Chinese demand — taking Indian buyers away from US coking coal in the month.

Canada shipped 330,000t of coking coal to India in May, a 38pc increase from a year ago and a 104pc jump from April, Global Trade Tracker (GTT) data show.

Chinese buyers have imported far less coking coal in January-May, slashing their imports from Mongolia in particular. But the slide in Canadian imports has been a more recent development. Canada's exports to China fell by 29pc in May to 837,000t. Traders have attributed a wave of low-priced Canadian offers to the decline in China's seaborne imports.

Canadian mining firms have increasingly relied on the Chinese steel industry, as demand from Canada's traditional north Asian buyers — Japan, Korea and Taiwan — has weakened and Australian coal exited China in 2020.

Canada's suppliers shipped 32pc less coking coal to Japan on the year in May at 404,000t, extending a two-year decline in its exports to the country.

US suppliers shipped half as much coking coal to India on the year in May at 449,000t. US coking coal exports dropped by 14pc, with weak interest in Brazil and Japan also weighing on the country's market.

Buyers in Europe helped offset some of the year-on-year decline in US exports, taking 41pc more on the year at 1.1mn t.

US suppliers also found renewed interest from Indonesian coke producers, sending 144,000t to the country, an 89pc jump from the year before. Indonesian coke-making capacity hit new heights late last year, bringing record US shipments to the country from November to February, but that new demand largely died out in March and April, when coke prices hit historic lows worldwide and cokeries found cheaper coking coal elsewhere.

The Argus metallurgical coke 65 CSR fob Indonesia assessment dropped by $23.10/t from January to the start of March and several producers started cutting production.

The Indonesian coke assessment fell to $191.50/t last week, the lowest price since Argus started assessing the product in November 2023. US coking coal suppliers say they are expected to sell to the country at a discount to low-volatile cfr China prices, meaning many producers are making sales at a loss.

Indonesian buyers were also attracted to lower offers from Canada, with Canadian suppliers shipping a record 268,000t to the country. Canada exported 79,000t of coking coal to Indonesia in April with no prior exports to the country, according to GTT data.

By Austin Barnes