US coking coal prices have been edging downward since May this year, in line with falling Asia-Pacific indexes, as the downstream steel sector continue to struggle with weak demand across the globe.
Weaker steel output and iron ore rates have hit all major coking coal-consuming nations across Europe, Brazil, the US and Japan.
The Atlantic metallurgical coal export markets have been suffering from weaker steel prices and lower steel mill utilization rates right from the first half of this year. As steel production declines gathered pace in the Atlantic Basin, coking coal consumption softened dramatically, in turn reducing offtake from steel buyers in the US and Europe.
Furthermore, a consistent decline in the fob price of Australian premium low-volatile hard coking coal (HCC) in the Asia-Pacific markets has weighed heavily on the export pricings for comparable grades of US-origin coking coal, mainly high-volatile type A (HVA) and Low Vol.
US HVA coking coal, in particular, has undergone the sharpest drops relative to the Australian premium low-vol HCC grade.
Meanwhile, however, demand for US coking coal from India has lately regained strength, with the gradual resumption of normal market activity following the delayed retreat of the seasonal monsoon rains in most parts of the country.
PRICE ASSESSMENTS
The latest FOB US East Coast price of low-volatile hard coking coal is assessed at USD 139.00/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 167.75/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 28.75/MT for delivery by Panamax vessel class.
The US high-volatile type A (HVA) coking coal price is assessed at around USD 145.00/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 134.00/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.
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