Atlantic coking coal: Tightness sustains high volatile

US coking coal prices are a mixed bag this week, with low volatile coking coal prices continuing to lose ground alongside a weakening China cfr price while high volatile coking coal prices held steady.

The Argus-assessed US low volatile coking coal price fell by another $9.60/t today to $406.90/t fob Hampton Roads as falling Chinese domestic coal prices weighed on cfr China price indications while Chinese buyers continued to stay out of the seaborne market. The high volatile A and high volatile B prices are flat today at $395/t fob Hampton Roads and $315/t fob Hampton Roads respectively, as the lack of spot loadings until January at the earliest has kept price expectations bullish despite the softness in low volatile coals.

Ready availability in the low volatile coal segment has not helped already weakening sentiment. Cargoes heard to be available to load as soon as November have emerged on the market this week for Blue Creek 7 and Buchanan coals but no offers are understood to be given, with suppliers waiting for bids instead. "Buyers are just not bidding, even if there may be ready demand, no one wants to commit while prices are still falling," one trader said.

The 40,000t cargo of US Rustic Ridge loading between late November and early December was heard offered at $455/t cfr China yesterday, a significant drop from the initial $570/t cfr China fixed price offer less than 10 days ago. While buyers have naturally been sidelined by the fall in prices, other market participants are less concerned. "Prices in the over $600/t cfr China range were never going to be sustainable in the longer term and this is just a natural correction. There is still lunar new year stockpiling to think about and that depends on how long the discharged Australian coal will sustain Chinese mills," one supplier said.

European and south American mills are still enquiring about December-loading high volatile coal but US miners have no availability until at least January. The rail disruptions and upcoming holidays in the US are likely to add to the lack of ready tonnes, US miners said. Demand from India has also been robust, one miner said, but buyers are understandably hesitant as prices in the low volatile market continue to fall.

Flooding in British Colombia is likely to add growing supply concerns in the market as major producer Teck's deliveries are expected to face some interruptions. But any concrete information on the extent of the disruptions will likely take time, a company source said today. "We will continue to produce and ship coal but it will reduce efficiency. An announcement on the prediction of the impact will be made in the next few days."