January 23, 2020 - Cautious optimism over emerging spot interest in Brazil and Europe has kept Atlantic prices largely steady this week, despite slowing activity in the Asia-Pacific region in the run-up to the lunar new year holiday.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal in the US was unchanged today at $131.50/t fob Hampton Roads, supported by pockets of spot demand emerging in Europe and Latin America. The high-volatile type A daily price is also unchanged at $138.50/t fob Hampton Roads. But the high-volatile type B price has edged down further by $1.50/t to $124.50/t fob Hampton Roads today.

Market confidence has continued to grow in Brazil, with some mills close to concluding their term purchases for the first half. But one mill that had closed its tender before Christmas has still yet to respond to bids, one US miner said. Brazilian mills are expected to return again in May and June for their second-half requirements. A Brazilian mill closed a spot tender on 20 January seeking a Panamax of low-volatile coking coal, possibly to replace a shortfall in its Mozambican supplies.

A northern European mill has a spot requirement seeking 10,000t of high-volatile and 10,000t of low-volatile coal loading in early February. It is unclear if this is an open tender. Market expectations are for more European spot demand to emerge in the second quarter.

"Most mills have purchased at minimum levels in their 2020 term contracts and this will definitely make room for more spot buying from Europe later this year," a US supplier said.

Offers for high-volatile type B coals from the US continue to be competitive with some producers still trying to clear stock to generate cash. While discounts have narrowed from 10-15pc below index offers from some miners before Christmas when inventories were very high, one European mill has this week reported securing a March-loading cargo of high-volatile type B material at $118/t fob Hampton Roads.

"Inventories have been worked down via sales and production cuts and these aggressive pricing tactics seem to have waned," a US producer said, "In addition to spot demand in Europe and India, Brazil is also booking cargoes earlier than we expected," he added.

There continues to be growing optimism among US miners following last week's interim trade deal between the US and China, which indicated an intention to increase coking coal sales from the US to China. But there remains no further development on whether China's 25pc retaliatory tariff on US coal imports imposed in August 2018 will be removed.