US Coking Coal Prices Decline as Major Buyers Hang Back

US coking coal export prices fell further in the past week amid scant trading activity in the Atlantic region, as European steelmakers stayed away from the market and continued to exhibit a wait-and-see approach to spot bookings of seaborne materials for delivery in the coming months.

Buyers in Europe are holding back from buying metallurgical coal because they believe that prices will most likely come down further, as met coke demand may come under increasing pressure from widespread steel output cuts across Northwest Europe.

Moreover, the European market is well supplied and the majority of steel mills are well-covered by term contracts for the next few months.

With European buying slowed down, US coking coal exporters are largely focused on selling additional tonnages to Brazil and India.

Until recently, Indian buyers were actively seeking US coking coal for stocking up ahead of the monsoon season — although their restocking activities have now moderated.

Meanwhile, a growing interest in Russian coking coal has been observed lately in Europe and Asia, as certain Russian high-vols are fairly similar in quality to US high-vol brands.

US Coking Coal Exports to India

According to the latest shipment data compiled by CoalMint Research, Steel Authority of India (SAIL) has received two consignments of coking coal — 27,000 MT at Haldia port, and 47,000 MT at Dhamra port.

At the Paradip Port in Odisha, Jindal Coke received 16,735 MT, while Trafigura received 35,000 MT.

JSW Steel is expected to receive 92,036 MT at Mormugao port in Goa this week.

PRICE ASSESSMENTS

The latest FOB US East Coast price of low-vol hard coking coal is assessed at USD 178/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 207/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 29/MT for delivery by Panamax vessel class.

The US high-volatile type A (HVA) coking coal price is assessed at around USD 195/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 157/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.