Thursday 07 November 2024 - 17:59

Date: 18 December 2019 , 20:30

News ID: 8009

NEWS SERVICE: MINES and MINERALS

Coal Coal Exchange & Stocks Sailing, Ports & Shipping

Atlantic coking coal: Stockpiles drive down prices

Poor spot demand in Europe, where several mills have been rolling over fourth quarter term shipments to the first quarter of next year, and high stock levels at US mines continue to put downward pressure on prices.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal in the US is unchanged today at $127.50/t after falling by $2.50/t early in the week amid competitive offers in a lacklustre market. Similarly, after declining earlier this week, the high-volatile type A daily price is flat at $132.50/t, while high-volatile type B remains at $125.50/t, supported by February demand in Asia Pacific.

Sentiment is decidedly downbeat in the Atlantic as the year draws to a close. "The market is very tough. I am hearing of several US mines who have built up large stockpiles," one Europe-based trader said. But mining firms in a stronger position are still cautiously optimistic that anticipated consolidation and even mine closures in the US will tighten the market next year .

Following its tender earlier this month for January and February cargoes, a Turkish mill has returned to the market with another regular tender seeking a cargo of metallurgical coke and two cargoes of premium mid-volatile coking coal to be delivered in March next year.

The focus in Europe is still on annual term tenders that have been issued in the third or fourth quarters, which participants expect will be announced before Christmas. But several major European mills working on annual contracts that only renew in April 2020 are taking their time to decide on requirements and agree prices, in what has been largely a buyers' market this year.

"It is still not yet clear which direction US prices will take with all these variables in demand, viability of mines with prices falling and trade tensions," a European steelmaker said.

While there were hopes that Indian buyers will help lift US export demand, the ready availability of offers and buyers expecting prices to slip further have meant that few mills are ready to commit.

The interim trade agreement reached between the US and China last week has renewed hopes among US mining firms that China will resume regular imports of US coking coal next year. The agreement includes commitments by Beijing to purchase $50bn of agricultural commodities and another $200bn worth of energy and manufactured products and services in the next two years, a senior US administration official said. This has the potential for China to more than double its imports from the US from 2018 levels. Chinese officials have declined to confirm details of these purchase commitments and Beijing also did not disclose how it plans to match the reduction in the US tariff rate.

source: Argus Media