[Ferro-Alloys.com] The recent production cuts announced by Australian coking coal producers point to even greater cost pressures that their US counterparts are facing, as coking coal prices continue to bear the brunt of steel mills lowering output as they struggle with narrowing margins.
US-Australian mining firm Coronado Coal cut its production guidance to 16.5mn-17.0mn t for this year from 19.7mn-20.2mn t and took a $60-70mn write-down on the value of its Greenbier mine in the US, which is likely to be closed for the rest of this calendar year. Australian mining firm South32 cut 250 contractors from its Illawarra metallurgical coal division in New South Wales (NSW), with most job losses at its Appin mine. These recent production cuts follow on from similar moves by Peabody, AMCI and Stanmore Coal.
Coking coal prices have recovered from the three-year lows seen in May but they are still significantly down from where they were just a year ago. The Argus-assessed Australian premium hard low-volatile price is assessed at $115/t fob today, down from $194/t a year ago, while the US high-volatile A price stands at $113/t fob Hampton Roads, down from $190/t.
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