| 1 | | Matt Warder GM Coal Traders! Getting our pricing note out early today as the producer's panel at the MetCoal Producer's Association annual meeting is already underway, with XCoal'sErnie Thrasher set to present on markets immediately afterwards. SGX futureshaven't been updated yet, but given the inactivity in physical markets, we don’tanticipate much change there anyway. Seaborne coking coal prices started the week on a stable note, with limited spot activity and growing buyer hesitation evident across both the Pacific and Atlantic basins. Premium low-vol FOB Australia edged slightly higher to 0.90/t, while second-tier material slipped to 7.80/t. CFR India assessments moved similarly, with premium up to 4.75/t and second-tier down to 1.65/t. In India, softer steel and coke prices continue to weigh on sentiment. Merchant cokeries are contending with falling domestic coke prices — now around Rs32,000–32,500/t (4–380/t) — prompting buyers to step back. A new enquiry for 40,000t of premium hard coking coal was issued by one Indian end-user, but broader procurement remains slow ahead of the monsoon and in the absence of clarity on import restrictions. Meanwhile, in the Atlantic, U.S. suppliers are flagging tight supply across most grades, but demand has yet to follow. The FOB Alabama low-vol assessment held at 5/t, while high-vol A and B coals were steady at 5/t and 2.50/t FOB Hampton Roads, respectively. Producers are increasingly rejecting index-linked pricing in favor of fixed terms to cover rising costs. Rail delays due to flooding and landslides have further tightened supply. Despite logistical hurdles and limited spot availability — including some ships loading underweight and incurring demurrage — buyer urgency remains low. European and South American mills are largely covered by term contracts, while Asian buyers remain on the sidelines, anticipating discounts that U.S. miners are unwilling to grant. Even a sharp reduction in Chinese tariffs on U.S. coking coal — from 143% to 28% — failed to stir interest. Traders largely agree that U.S. coals remain uncompetitive in China at current levels. Broader sentiment was further dampened by the arrival of Canadian cargoes in Brazil and India, markets where Canadian supply is rarely seen, suggesting opportunistic selling and softer demand fundamentals globally. Overall tone remains cautious, as supply-side constraints are increasingly counterbalanced by a cooling in end-user appetite across key markets. And of course if Ernie changes my mind about any of this stuff, we will send you an updated note later. ;-) -MW |
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