Atlantic coking coal: US prices hold firm

US export coking coal prices held fairly steady in the past week, supported by robust demand fundamentals and expectations of fob Australia price hikes in the near-term.

The Argus weekly fob Hampton Roads assessment for low-volatile coking coal has edged down $1.50/t to $185/t based on the latest indications in the market, although overall prices for this grade remain well supported by fundamentals. The high-volatile type A (HVA) and high-volatile type B (HVB) assessments are both flat on a week ago at $198/t fob and $164.50/t fob, respectively.

Some talks have been ongoing in the past week, focusing on a mix of spot and second quarter term deals. A US producer noted pockets of spot demand in Europe, noting that some Q1 tonnes are being discussed unusually late and expressing surprise that some Europeans still have delivery slots to fill for March.

Several US producers confirm some recent changes to laycans for existing customers, with some cargoes being dispatched earlier than previously-agreed and in occasional cases fragmented so as to deliver partial cargoes ahead of schedule with the remaining tonnes to follow later. This pattern of laycan adjustments is in some cases attributed to Australian port delays, which are prompting some mills to hasten the arrival of US tonnage in order to bridge any supply gaps. But other factors are also noted, in some cases specific to the individual customer.

European mills are closely monitoring vessel queues at Queensland export terminals, which have ballooned lately because of heavy rainfall. But while the potential impact on fob Australia indexes is being tracked, European buyers are not particularly concerned about supply itself as their inventories are well-stocked and they typically approach the first quarter expecting some form of weather-related Australian disruptions.

In contrast to Australia, US east coast vessel queues have been fairly moderate lately. And railroad Norfolk Southern's push to improve service in the past year appears to be paying off, with a regular user of the Lambert's Point terminal saying nowadays it is sometimes a case of the vessel waiting for the coal rather than the other way round.

Elsewhere, there is talk in the market that a Turkish mill may have recently booked a Panamax cargo of Colombian coking coal. Some market participants cast doubt on the claim, saying they have not seen Turkish mills seeking spot cargoes for at least the past three weeks, and no such deal had been confirmed by the time Argus went to press.

But a non-Turkish end-user said it is not implausible that a Turkish mill might be trialling some Colombian material, even if it is not part of their regular booking pattern. A US producer said they have received some recent interest from Turkey, suggesting that further deals may soon emerge for high-volatile coking coal.

A couple of Atlantic market participants have noted potential new supply disruptions in Poland. These reports had not been confirmed by Polish coking coal producers by the time Argus went to press, but a US exporter said the disruptions are opening up fresh opportunities to sell high-vols into Europe.

Meanwhile, a European market participant noted a recent spate of enquiries for Russian coking coal, attributing them in part to growing interest from several end-users – both in Europe and elsewhere – for alternatives to higher-priced Australian grades.

Spot freight rates from Russian northwestern ports to the Amsterdam-Rotterdam-Antwerp (ARA) hub are currently at a multi-month low of $6.35/t – down by around 25¢/t from a week ago – owing in part to lower regional demand for thermal coal cargoes.