Although the preference for Australian over US coal continues, US high vol B is still holding its own in the market. Some buyers are now looking to the next benchmark with expectations of a fall from the current $89/mt FOB Australia.
One Europe-based producer cited a "reasonable level of interest in US high vol B coal recently, especially since the closure of BHP's Gregory Crinum mine in Queensland." He added that "US HVB producers can still be competitive, and produce without any debt, especially with potential issues looming at other mines." It could be three to four months before this takes full effect, he said.
PCI prices are stable in the mid-$70s CFR ARA for Russian material, but "there is not a lot of demand around now," he said. "However, getting good quality low vol PCI from Australia is not too easy unless one buys a whole Panamax; it's not too easy to buy only one hold in a Capesize, and the problem is if you buy an entire Panamax then one loses the fright differential and may as well buy Russian instead."
One buyer for a European mill said that he continues to monitor both the Australia and US for spot and contract deals but added that "we are done for this year and won't buy until after January now."
"We are keen to see what the next benchmark will be as we believe it will be lower by some dollars," the buyer said. "The indices have continued down and Chinese imports are lower; but also China has cut its costs at its mines and so the domestic price will become cheaper again and so the seaborne price will have to fall."
He underlined that Australia needs to sell and that it has no intention of cutting production.
Platts US low-vol HCC assessment, based on good quality CAPP low-vol with 58% CSR and 1.5% MMR at 19% VM, was stable at $76/mt FOB USEC.
Platts US high-vol A assessment was also flat at $78.50/mt FOB USEC.
Platts assessed US high-vol B, based on 34% VM coal with 25,000 ddpm, up $0.50 at $73.50/mt FOB USEC.
