The Argus daily assessed low-volatile fob Hampton Roads price remained unchanged at $103.50 / t today, while the high-volatile A and high-volatile B coking coal prices remained at $109 / t fob Hampton Roads and $103 / t fob Hampton Roads, respectively.
There have been pockets of spot demand in Europe for the third quarter, but market expectations for most mills remain well-supplied by term contracted shipments for the rest of the year due to low demand. Despite the rise in new car registrations in May compared to April, when most of Europe remained in the thickness of the Covid-19 lockdowns, the market for hot metal from car manufacturers is still not expected to recover quickly. New passenger car registrations in May were down by 52pc per year, with a drop from January-May to 42pc per year, underpinned by sharp declines in Germany and Italy, according to data from the European Automotive Manufacturers Association (ACEA). Northern European mills are mulling further capacity cuts this year.
A big European mill, which emerged a few weeks ago with a spot demand for high-volatile B coal to be shipped in the third quarter, has yet to make a decision, said a miner who made a bid.
The Turkish mill closed its tender on 11 June seeking four cargoes of low-volatile and high-volatile gas. The needed delivery times for low-volume coal are mid-August and mid-September, while the two high-volume coals are loaded by July. The high-volume tender defined a maximum of 35.5 pc of volatile matter and 1.1 pc of sulphur, which is the highest allowed by Turkish import restrictions. A trader said they offered two Panamaxs of Australian high-volatile semi-soft coals without success. “We only put a $1.50/t margin on it, but the buyer was adamant they would be able to get the coal for under $90/t cif Turkey, which suggests they are looking at Russian material. There are a couple of Russian brands which meet those specs,” the trader said.
Despite the muted spot interest in Europe, US miners remain confident going into the third quarter. “Our position is reasonable at the moment. We had one or two push backs in the second quarter which we refilled with spot business and we’re still not hearing any pushback for term contracted cargoes in the third quarter,” said one US miner.
Brazil has ceased to be a viable place for the near term in the light of the worsening coronavirus pandemic in the region, but the tightness of low-volume supplies in Asia-Pacific has opened up an opportunity for a US miner. Despite some worries in the Chinese market about improvements to the restrictions on imports of coal, a US miner shipped low-volatile coal to a Chinese buyer at the beginning of June. It is likely that the cargo will still be traveling to China.
Asian and Polish producers have been told to deliver met coke to China at around $230-240 / t CF China, while a trader said that Colombian coke producers met are struggling to sell to European buyers.
