US Coking Coal Prices Continue Falling on Sluggish European Demand
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The United States' metallurgical coal export prices have edged down over the past two weeks, with ample supply amid reduced purchasing from European steel mills, despite firm buying interest observed in the Asia-Pacific market.
Traders and producers reported limited Atlantic spot market activity for seaborne coking coal, citing subdued demand from steel industry consumers in Europe.
Analysts concurred that the European market appears to struggle at the moment, with lower steel prices and higher input costs continuing to weaken the profitability and cash flow generation of steel producers.
European steel producers are facing economic pressure from various external factors - rising foreign imports due to ineffective trade protection measures, downturn in automotive manufacturing market, and increasing iron ore and electricity costs - having softened the country's overall steel sector outlook.
Elsewhere in the Chinese market, conclusion of fresh trades was done on offers, excluding the import duty and tariffs.
The Chinese Ministry of Finance has recently allowed for exemptions on US imports, including coking coal.
Notably, the Chinese government had imposed a retaliatory 25% tariff on $16 billion worth of US products effective August 23, 2018, shortly after which the US imposed a 25% import tax on Chinese products.
PRICE ASSESSMENTS
The latest FOB US East Coast price of low-vol hard coking coal is assessed at USD 181/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 211/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 30/MT for delivery by Panamax vessel class.
The US high-volatile type A (HVA) coking coal price is assessed at around USD 198/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 160/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.
