Coal news and updates

Uncertainty on US price expectations as market remains low

Atlantic coking coal markets Thursday felt growing uncertainty in both spot and contract prices based on recent sharp falls in Asia, and lack of demand for US material affecting high-vol material more so than for low-vol HCC.

One European coal buyer said that he was about to make spot inquiries to the US for mid- and high volatile material and was "interested to see what the producers would be offering at given the current low prices".

He said he would like to see prices of around $115/mt FOB USEC for high vol A and around $107-8/mt for high vol B, with mid-vol at around $117-8/mt.

However, he added that considering that the US market said it was close to making losses when low vol was at $125/mt, and given the Platts US low vol assessment is at $119.50/mt, he wonders if they would really be willing to sell at such low prices.

Platts US low-vol hard coking coal remained at $119.50/mt FOB USEC, US high-vol A was steady at $116/mt USEC and the Platts high-vol B assessment was flat also at $107/mt FOB US East Coast.

The buyer said also that he had been looking at material from Colombia and that offers had been made from there in recent weeks for $115-116/mt for coal with 32-33% VM and 56 CSR. However, he said he did not buy because the freight -- around $15/mt at the time -- did not justify what was actually a good price. He concluded that there is a lot of coal available from Colombia at the moment and that some "half-dozen traders" had been offering material from there in recent days.

On coke, the buyer said that he had seen Colombian coke offered at Eur180 ($250)/mt CFR Rotterdam; which nets back to around $235/mt FOB, with current freight costs also at around $15/mt from Barranquilla.

One US coal producer said that he had no spot material to sell at the moment and is entering negotiations for Q2 at the end of this month. He said that he had seen some US low vol sold into Poland at $130/mt recently, along with mid-vol at $126/mt, but could not provide more information on the spec or brand, he added that he assumed it was "good CSR".

Regarding the current Platts spot assessment, he said that "quite a range of prices were happening at the moment." As to what he expected to achieve for his Q2 deals, he said that the market was moving in such a way now that it is difficult to comment on expected prices. On the current premium for contract over spot, he said that "there is not enough history" of monthly/quarterly prices to give a clear indication.

Source: Platts