US Coking Coal: Prices Sink on Poor Demand amid Steel Output Curbs
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US metallurgical coal export prices fell further this week as more blast furnaces around Europe were idled and steelmakers continued to cut output in response to falling demand caused by the corona virus pandemic.
Weaker demand in North America, and globally outside China is leading to slower inquiries and delays to confirming laycans.
US low-vol HCC price assessments fell, in particular, due to the lack of spot demand in the Atlantic met coal markets as well as worsening demand outlook for seaborne coking coal and PCI in the major Asia-Pacific markets of China and India.
Indian demand for seaborne coking coal has remained subdued, as the country's government has enforced a total lockdown over its population of 1.3 billion people for 21 days starting March 24 as a preventative measure to control the spread of the deadly corona virus.
India's apparent curfew which has now been extended until May 3 is likely to impact the US coking coal export market because India is a key buyer of both coking and thermal coal from the United States.
There is little to no European spot activity this week but participants remain hopeful that easing lockdown restrictions and falling Covid-19 infection rates and deaths in some countries point to the possibility of spot demand returning as soon as May.
PRICE ASSESSMENTS
The latest FOB US East Coast price of low-volatile hard coking coal is assessed at USD 125.50/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 146.75/MT on CNF India basis, after considering a USEC-India dry bulk freight rate of USD 21.25/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 125.00/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 120.00/MT FOB USEC, based on 8% ash, 0.95% sulfur and 34% volatile matter.