US coking coal export price rose in the past week, supported by rising Asia-Pacific marks and firm buying interest with market participants noting a strong focus on India negotiations in the past week.
The Argus weekly fob Hampton Roads assessment for low-volatile coking coal is at $190.50/t today, up by $3.50/t from a week ago. The assessment for high-volatile type A (HVA) coking coal is up by $4.50/t at $204/t fob Hampton Roads, while the high-volatile type B (HVB) assessment gained $3/t to reach $168.50/t.
The European spot market has been fairly quiet in the past week, albeit discussions have been noted to finalise some second quarter pricing terms and laycans within the framework of longer-term supply deals. The European coking coal market has had a subdued start to the year, with minimal spot activity and shaky steel fundamentals encouraging a cautious approach to raw materials restocking.
A European trader told Argus he has been waiting to place a cargo of US HVB with a European mill for a few weeks, but the mill has indicated that it is not yet ready to go ahead with a new purchase and the discussion is on hold.
Indicative prompt offer levels were noted at $208/t fob for HVA and $172/t fob for HVB, and US exporters are unlikely to adjust target prices down given robust fundamentals and recent upward momentum in the Asia-Pacific market.
US suppliers have been heavily focused on sales into Asia in the past two weeks, with many drawn towards an industry event in Delhi last week. Negotiations were noted on a mix of fixed price and index-linked terms, focused on shipments for second quarter delivery and beyond. One US producer – which has been exporting to India for several years – said it is receiving requests from certain long-standing Indian customers for higher tonnages than ever before, reflecting the strength of Indian coking coal demand overall and in particular a growing appetite for US high-vols.
Meanwhile, speculation has been building about prospects for US coking coal building market share in China, in light of recent moves by customs at north China's Dalian port to tighten the quota on Australian coal imports this year.
US coking coal exports to China ground to a halt last year after China imposed a 25pc tariff on imports of US coking coal in August. They have since restarted after customs restrictions ease and at least one major US supplier is in negotiations with Chinese mills to build up in this market, but those talks were begun before the latest customs issues at Dalian arose. "Right now [the customs issue] more of a noise in the background that people are monitoring, but I haven't yet seen any activity in the market as a direct result of what's going on," an Atlantic market participant said, noting that it is too early to say whether issues concerning Australian coal into China will actually translate into any clear opportunity for the US.
In general, Australian supply concerns and infrastructure constraints remain a concern to European market participants largely from the perspective of price sentiment. But no European mills have voiced strong concerns this year about delays to incoming Australian coking coal cargoes and all are understood to be sitting on comfortable stocks.
