However, the impact of the reduced output on the market has been reduced by a sharper fall in demand, and producers including Coronado, Corsa Coal, Warrior Met Coal and Contura Energy have increased their output in the same quarter.
Mine stoppages have only occurred since 20 March, which means that many mining firms have reached the second quarter with high inventories as demand has subsided. Argus ‘s regular assessment of Hampton Roads for high-volume coking coal fell to $106.50 / t in early May, the lowest since August 2016.
Contura produced 2.6mn st (2.36mn t) of its 14 coking coal mines in the first quarter, a year-on-year increase of 16.9pc and an increase of 13pc in the quarter, according to data from MHSA.
Blackhawk Mining, which filed in July last year for Chapter 11 bankruptcy protection, was bought by the Czech company. Last week, 1.42mn of mostly coking coal was generated in the first quarter, a 30.7pc annual drop. At its Hampden Complex, the miner produced no coal at all.
Ramaco ‘s output of different grades of coking coal grew 7pc from the fourth quarter to 477,592. Rosebud Mining, which supplies the US market to a large extent, produced 866,500ths of low-volume , high-volume A and high-volume B in the first quarter, a 10.8pc decrease from the fourth quarter. Robindale, another domestic-focused mining company, produced 234,364th anthracite, low-volume and mid-volume, down 21,7pc in the quarter and 34pc in the year.
Arch’s high-volume A production at its Leer and Sentinel mines decreased by 4.6pc year on year and by 5.4pc from the fourth quarter of last year to 1.15mn. Arch is a major global supplier of high-volume A coking coal, and this timely reduction in output may strengthen its position, with Argus ‘s daily fob Hampton Roads high-volume A assessment at $109 / t as of today, down from $129.50 / t at the start of t
In the meantime, some major producers of low-volume marine coal have increased their production. Coronado’s low-volume production at Buchanan Mine increased by 7.3 pc to 1.33 mn per year and increased by 34 pc per quarter. Warrior ‘s production of low-volume material at its two active mines increased by 15.8 pc quarter to quarter, but decreased by 8.6 pc per year to 2.1 mn st. Corsa increased its low-volume coking coal output by 42 pc per year to 428.308. Argus ‘s daily valuation of low-volume coking coal is today at $103 / t fob Hampton Roads, down from $125 / t at the beginning of 2020, with low-volume cokings having faced heavy competition from comparable Australian low-volume premium materials in the Asia-Pacific market.
Demand falls further
Demand indicators for US coking coal indicate that it decreased in the first quarter, but subsequently declined significantly. The first quarter of the US steel capacity utilization rate of 79.4pc was down by 2.7pc over the same period a year earlier, while US coking coal exports fell by 10.49pc per year and by 3.29pc per quarter to 11.67mn per quarter.
A survey of US coking coal mines found that production increased by an average of 0.2 pc over the previous quarter in the first quarter of this year and decreased by an average of 11 pc compared to the same quarter last year.
April ‘s exports decreased by 27.9pc per year to 3.45mn, trade data shows, while US steel capacity utilization was at 53.8pc in the week ending 30 May, which suggests that some miners may seek to reduce output in the second quarter.
In recent weeks, the tightening of Chinese import restrictions has caused further damage to sea-borne coking coal, and several US suppliers have recently indicated that they have not been able to trade with Chinese buyers, while trade data indicate that the US exported non-coking coal to China in April.
