July 14, 2020 - US coking coal prices have been weighed down by a fall in Asia-Pacific prices as sellers reduce their offers to boost interest, with many Chinese buyers having already exhausted their import quotas.

The Argus daily low-volatile price edged down by $1/t to $106.50/t fob Hampton Roads, while the high-volatile A and high-volatile B prices have dipped by 50¢/t to $113/t fob Hampton Roads and $107/t fob Hampton Roads, respectively.

A tender from a Turkish mill seeking one high-vol cargo, one low-vol cargo and two mid-vol cargoes for delivery between late-September and October closed yesterday. The results are not expected to until the end of this week.

Market expectations for Brazil remain strong, despite the country's new Covid-19 cases continuing to rise. A Brazilian mill is heard to have issued a tender seeking a trial 10,000t cargo of low-vol or mid-vol material.

"The contraction of the Brazilian economy doesn't seem as bad as previously expected," a trader said. "It certainly has been more positive for the mills than the market expected."

ArcelorMittal last week announced plans to restart blast furnace number 2 at its Tubarao plant this month, following on from blast furnace restarts by CPS and Gerdau Acominas. "More buyers are also looking to increase the size of existing stems," the trader added.

Traders and miners are hopeful that the stronger Brazilian demand will go some way to counteracting the decline in Indian demand. Market expectations are mixed over the prospects of Indian demand returning in September after the monsoon season, as the country struggles to contain Covid-19. The political standoff between India and China also means that shipments to China are less viable for Indian steelmakers looking to increase exports, while domestic consumption remains slow. One Indian mill was heard to have pushed out some term deliveries, citing Covid-19 disruptions. But others expect Indian buying to restart eventually. "India is sitting on the sidelines waiting for the China quota bubble to burst in order to take advantage of a fall in seaborne pricing," said a supplier.

European demand remains largely limited to one or two mills in the third quarter, but there is hope that demand may strengthen in the fourth quarter. There may potentially be interest from the German mills for the fourth quarter, said a Europe-based trader. The delivered Rotterdam price is assessed at $119.50/t, up by 50¢/t on the week, supported by freight rates that rose last week as tonnage tightened.

Mills facing rising iron ore prices are moving to increase prices. Tata Steel today added £50/t ($62.50/t) to its coil prices for UK customers with immediate effect, following ArcelorMittal's hot-rolled coil price hike announced earlier this month.

Ramaco Resources yesterday said that it plans to partially close its Berwind low-vol mining complex, "to align current production to the weakened metallurgical coal market".

US steel production continued its gradual recovery in early July, driven by increased production in the Great Lakes and Midwest. Utilisation rates rose to 57.5pc for the week ending 11 July, up from 56.6pc a week earlier, data from the American Iron and Steel Institute show.

The US has operated at under 70pc utilization for 15 weeks, compared to pre-pandemic rates of steadily above 80pc.