Atlantic metallurgical coal buyers and miners Friday were positive on the reported $81/mt hard coking coal benchmark, with new spot US offers looking to match or exceed this reference.
Some buyers were bracing for a settlement closer to an $84/mt FOB offer level, sighing relief that $81/mt was heard done and the gap between contract with spot prices had reduced.
Miners seemed to accept the decline in the benchmark of $8/mt quarter on quarter as better than the possible outcome when spot FOB prices from Australia and the US into the Atlantic were in the $70s/mt.
US prices lifted, as miners looked to sell at higher levels after selling lower in a weak overall market while trying to meet December and annual targets.
"The US market may not necessarily follow the benchmark all the way down," said one miner, eyeing a supply shift aiding surviving exporters next year. "The US is a different sort of product, and hopefully will get better prices."
Demand for US coals to receive high fluidity, low ash and phosphorous in coke blends remains, with buyers seemingly willing to pay a small premium to keep the best coals in the blend.
Pricing for Australian premium mid-vol with higher fluidity and high CSR low-vols at parity for a second quarter may benefit US high-vol A in particular, especially with loss of output seen from Alabama, suggested a miner.
Further new annual pricing in domestic contracts, and the spread with export prices is seemingly too high to help maintain export supplies longer term, with decisions from companies and their creditors around coal production levels expected to shave tons from port throughput.
Platts' US low-vol HCC assessment, based on good quality CAPP low-vol with 58% CSR and 1.5% MMR at 19% VM, rose 25 cents to $78.25/mt FOB USEC.
Platts' US high-vol A assessment rose 50 cents to $80/mt FOB USEC.
Platts assessed US high-vol B, based on 34% VM coal with 25,000 ddpm, rose 25 cents to $73.50/mt FOB USEC.
As for PCI prices, at $69/mt FOB for the Q1 benchmark, the relativity lifting to over 85% to HCC was seen by buyers as detrimental to usage of PCI. This was especially so for lower quality mid-vol and high-vol PCI grades, which the US has exported, given low coke and natural gas prices.
With coke export prices weak and hard coking coal benchmark prices at a new low, weak steel operating rates may also be unsupportive in the broader market.
