US Coking Coal: Prices fall as COVID-19 dampens European demand

US metallurgical coal export prices fell this week on weakening demand outlook in Europe due to subdued steel demand amid the rapid spread of the corona virus pandemic.

Limited steel output rates at several European mills are anticipated to hit contract and spot volumes for coking coal exports from the United States. Moreover, potential disruption of coal shipments is worrying the US coal suppliers.

Atlantic met coal markets are seeing little signs of fresh activity without any new spot offer, while some contract-based activity had been seen apart from spot opportunity in Asia. Spot demand was otherwise absent for met coal, amongst other steelmaking raw materials.

China had been emerging as a bright spot with spot demand for US coking coal, but weaker domestic coking coal prices and falling met coke pricing has led to a pause in seaborne buying interest from the country's end-users.

Atlantic metallurgical coal and coke markets have already been facing potentially lower spot activity with lack of spot demand in Europe. Prices have come under further pressure in the past week, amid weak buying among European steel mills resulting from a further weakening in European steel demand.

PRICE ASSESSMENTS

The latest FOB US East Coast price of low-volatile hard coking coal is assessed at USD 140.00/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 163.25/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 23.25/MT for delivery from the Port of Hampton Roads by Panamax vessel class.

The US high-volatile type A (HVA) coking coal price is assessed at around USD 135.00/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 127.00/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.