Atlantic coking coal: 1Q spot volumes emerge

US coking coal prices stayed firm on 22 October, supported by the lack of spot availability for the rest of the fourth quarter, with loading dates for fresh spot offers shifting into January 2022 or later.

The Argus US low-volatile coking coal price is unchanged at $499.25/t fob Hampton Roads on 22 October, but it increased by $1.50/t on 21 October, buoyed by tier 1 cfr China prices trading higher amid the ongoing market shortage. The high-volatile A assessment edged up by $2.50/t to $397.50/t fob Hampton Roads, reflecting increased supplier confidence to offer $400/t and above for spot availability in the first quarter. The high-volatile B price moved up in line by $2.50/t to $317.50/t fob Hampton Roads, retaining the recently narrowed $80/t differential with high-volatile A, with availability similarly tight.

US coal mining firm Arch Resources is offering a January-loading Panamax cargo of Leer high-volatile A coal at $410/t fob US east coast, with expectations of securing at least $400/t fob. The Leer high-volatile A coal continues to command a premium in the market, being particularly well-established in the Chinese market. "We are having trading firms chasing us pretty hard for high-volatile A coal into China," said another US mining firm that said a European buyer was seeking 30,000t of high-volatile A coal last week. "We would be pushing for above $400/t fob ourselves."

While European mills have emerged regularly with pockets of requirements since late in the third quarter of this year, strong buying interest in Asia has no doubt encouraged US producers to seek out opportunities in the region. "It is in Asia where we think we will get the best value for our coal," a US supplier said. A tender issued by an Indian mill this week is seeking premium hard coking coal and semi-soft coking coal alongside 50,000-70,000t of high-fluidity US high-volatile coal, probably a high-volatile B coal. But in such a tight supply environment, the mill is unlikely to secure its requested loading period in the second half of November, market participants say.

A key producer in the high-volatile B segment does not expect to have fresh export availability until late February or March of next year. Citing delays to production, issues with rail allocations and potential disruptions, the mining firm expects a significant portion of coal production in January to go towards making up for domestic coal that will not be fulfilled this year.

US domestic coking coal term contract discussions are close to concluding, with several mills having finalised their 2022 contracts. While European mills have not fully commenced their term discussions, expectations are that more mills will approach the market in November.