US coking coal risks possible overcapacity

  • Tuesday, June 16, 2020
  • Source:ferro-alloys.com

  • Keywords:US coking coal overcapacity
[Fellow]US coking coal mining firms were put in a position of running up high inventories at the start of the third quarter.
 

[Ferro-Alloys.com

US coking coal mining firms were put in a position of running up high inventories at the start of the third quarter.
 
Total US coking coal exports fell by 27pc on the year to 3.13mn t in April, while Australian exports saw an annual contraction of only 1.44pc in the same month, at 13.4mn t. A survey of US coking coal mines indicated that production fell by just over 10pc in the first quarter, Mines Safety and Health Administration data show, and several mines that closed in March in response to the Covid-19 outbreak have since reopened.
 
A number of mining firms had a high level of inventory in April, and low spot deals pushed the Argus daily fob Hampton Roads assessment for high-volatile B coking coal down to $99/t on 29 April where it remained until 7 May. Supply adjustments have meant that mining firms now seem in a more comfortable position with inventory. The high vol B price has been assessed at $103/t fob Hampton Roads today.
 
But difficulties faced by Indian mills with logistics and weak domestic demand during the country's lockdown have meant that these mills are deferring term cargoes. Unless mining firms are making significant unannounced cuts to production, it is possible that US coking stocks will be high at the beginning of the third quarter, which could weigh on prices at a time when an uptick in spot demand is expected.
 
Source: Argusmedia

 

  • [Editor:kangmingfei]

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