US Coking Coal Prices Falling Further On Low Export Demand

US coking coal prices continue to remain under pressure due to the slowdown in spot demand from European mills, coupled with weakening fob Australian prices.

Moreover, the summer holiday period starting in Europe and North America is reducing market activity in the Atlantic region.

Nevertheless, greater demand from the two Eastern European countries of Turkey and Ukraine could lessen the impact of weakness in the rest of Europe.

Turkey and Ukraine Providing Bright Spots despite the European Slowdown

The Turkish government's recent reduction of its import tariff on US coking coal - notwithstanding a sulphur limit of 1.1% on coking coal imports - may encourage some additional buying interest in US met coal.

In addition, the ongoing Russia-Ukraine political issues impacting Russian coking coal supply into Ukraine might open up opportunities for US producers to sell incremental tonnages to the Ukrainian mills.

Difficulties surrounding imports of coal from the Russian Federation to Ukraine emerged since April, with the Russian government imposing coal export restrictions to Ukraine.

Ukrainians are more likely to prefer US coking coal as an attractive option than Australian owing to shorter delivery times and competitive prices.

PRICE ASSESSMENTS

The latest FOB US East Coast price of low-vol hard coking coal is assessed at USD 172.50/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 204.50/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 32.00/MT for delivery by Panamax vessel class.

The US high-volatile type A (HVA) coking coal price is assessed at around USD 186.00/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 152.00/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.