Atlantic coking coal: US prices flat

US export coking coal prices are holding broadly steady, with supply ample but robust Asia-Pacific fundamentals making it challenging for buyers to push for discounts.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal is unchanged today at $184/t. The daily fob Hampton Roads assessment for high-volatile type A (HVA) coking coal is also flat at $199/t, while the high-volatile type B (HVB) index edged down by $1/t to $162/t fob.

A trader said they have a HVB cargo to place and put the workable price at $163-164/t fob Hampton Roads, but added that the material has slightly lower sulphur content than the market norm, elevating the price slightly. The trader might look to direct the cargo towards Asia given sluggish European interest.

Overall European demand remains muted, with some routine discussions continuing but limited interest in extra spot cargoes. European mills are in an increasingly challenging situation, caught between sluggish steel prices and ever-increasing iron ore costs, but with limited scope to negotiate coking coal prices down given the dominance of Asia-Pacific fundamentals over the seaborne market, a market participant said.

A sell-side source agreed that the European market is struggling a bit at the moment, and with Brazilian demand covered by contracts there is limited Atlantic spot market activity for coking coal.

A Brazilian mill recently concluded a tender totalling around 1mn t of assorted coking coal products for June-November delivery, including 100,000t of HVB, 300,000t of 64 CSR hard coking coal, 400,000t of PCI, 100,000t of semi-soft high-volatile coking coal and 200,000t of semi-hard. Overall, confidence in Brazil's economic climate is stronger this year and the country's mills are increasingly keen to buy coking coal a few months in advance rather than engage in month-to-month procurement.

Chinese and Indian buyer interest remains, despite India entering the monsoon season and uncertainty continuing to hang over the status of Chinese import tariffs.

The sell-side source said that Atlantic buyers are unlikely to pay above $200/t fob Hampton Roads for HVA at the moment and prices for this grade may soften, potentially narrowing the price spread with HVB.

Buyers are also looking at rising freight costs for Australian and US-origin material into Europe. The Argus weekly cif Rotterdam assessment for US-origin coking coal is unchanged today at $193/t, partly because of a recent halt in freight rate gains. But Capesize rates from Australia to Rotterdam continued to rise in the past week, leading to an indicative cif Rotterdam spot price of $237.20/t for premium hard low-vols.