US coking coal offer prices into Europe remain low

US producers continue to offer high-volatility coking coals into Europe at very low price levels, sources told Steel First on Wednesday February 19.

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US high-volatility B material was heard offered below $110 per tonne fob, with one market source saying that material had been heard offered as low as $105 per tonne.

“Some of the producers will support these levels,” the source said. “No one will be happy to sell at these prices but they have to sell, and if this is all they can get they will go for it.”

Last week, Alpha Natural Resources, one of the USA’s largest coal producers, reported a net loss of $359 million in its 2013 financial results.

Alpha said that lower metallurgical coal prices and lower-than-expected shipment levels in 2013 contributed to the loss, but added that it had mitigated the effects of a lower pricing environment by capturing a greater share of the North American market.

The miner said that selling larger volumes into the North American market would help it avoid the consequences of volatile Asian spot coking coal prices. It expected European coking coal demand to improve through 2014 with an expected pick-up in the steel industry, it added.

While coke prices in India have seen a modest increase in the past week, coking coal demand remains depressed in line with continuing steel market weakness. The situation will not improve until April, a trader said.

Australian premium low-volatility material was heard sold at $131-132 per tonne fob, level with March contract prices.

“The contract premium has all but disappeared now,” a trader in India said. “Prices are at the same level now.”

Indonesian hard coking coal was heard offered into India at $117-118 per tonne fob.

Elsewhere, a slight pick-up in offer prices earlier this week saw buyers of Asian seaborne hard coking coal make more enquiries in the spot market, with some fearing that they had missed the bottom of the market.

Steel First’s premium hard coking coal index for material sold on a cfr Jingtang basis was calculated on February 19 at $136.29 per tonne, unchanged from Tuesday. The premium hard coking coal index fob Australia’s DBCT port was unchanged at $126.09 per tonne.

The cfr hard coking coal index stood at $124 per tonne, unchanged from the previous day, while the fob value was also flat at $113.14 per tonne.

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