[Ferro-Alloys.com] Spot activity continues to be sporadic in the Atlantic coking coal market, as participants hope that early signs of a stronger third quarter in terms of volumes will be borne out.
US coking coal prices moved up today, with the Argus daily assessment for low-volatile coking coal up by 50¢/t to $107.50/t fob Hampton Roads, while the high-volatile A and B assessments rose by $1.50/t to $113/t and $107/t fob Hampton Roads.
"I did not think recovery would come quite so early. But we are seeing car and pipe manufacturing recover when not so long ago the expectation for end-users was to be running on inventories for awhile," a US mining firm said.
Latin American longs producer Gerdau's announcement that it will restart blast furnace 1 on 1 July has also contributed to cautious optimism among suppliers who sell to Brazil. "Construction and white goods in Brazil have held up much better than I expected," a US mining firm said. "Until a few days ago, I thought Brazil was still searching for a lowest point, but now I think they have found one. Most big mills will remain cautious, which will hopefully encourage some stability."
Some participants are seeing "almost normal schedules" from Japanese and South Korean buyers for the third quarter, and one mining company said it had started discussions with at least three Indian buyers. "The pricing is low and it is hard to do business, but it is a good sign," it said.
A renewed spike in Covid-19 cases in the US has prompted fear among some buyers that supply may be disrupted. "I do not think that supply will be disrupted," a US mining company said. "But there has been a psychological shift after demand was the only worry for many weeks."
Some participants expect further mine closures in the US, with several producers operating below costs for a sustained period.
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