The United States’ metallurgical coal export prices have decreased marginally this week, in response to subdued demand in the Atlantic met coal spot markets and growing concerns around the sustainability of current price levels.
Currently, US miners are awaiting increased demand as they eye on Brazilian demand to remain a bright spot for them, despite growing reports of iron ore supply shortages after the Vale dam accident.
However, the US miners are heard to be facing difficulties because of tariffs in Turkey and China for US coals.
Meanwhile, import demand for US coking coals from the European steel mills has been fairly subdued, with minimal spot activity reported since the start of the year.
Market sources suggest that the near-term bearish outlook for iron ore and steel has conceivably discouraged the European mills to procure actively and instead adopt a cautious approach to raw materials restocking.
Notably, demand for lower-priced coals such as second-tier materials and low-CSR grades are anticipated to grow, with the second-tier HCC 64 reference index rising earlier last week.
Furthermore, scarcity in usual brands of high-vol A and high-vol B could lead to crossover coal blends being the only material available for late second-quarter loadings.
PRICE ASSESSMENTS
The latest FOB US East Coast price of low-vol hard coking coal is assessed at USD 183/MT, based on 58% coke strength after reaction (CSR), 8% ash, 0.8% sulfur and 19% volatile matter material.
For Indian buyers, the above price amounts to USD 212.50/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 29.50/MT for Panamax vessel class.
The US high-volatile type A (HVA) coking coal price is assessed at around USD 199/MT FOB USEC, based on 7% ash, 0.85% sulfur and 32% volatile matter.
The US high-volatile type B (HVB) coking coal price is assessed at around USD 162/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.
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