May 17, 2019 - UK imports of coking coal and iron ore fell in the first quarter, as multiple headwinds built in western Europe's steel industry and ongoing Brexit uncertainty hit the pound.

Coking coal imports totalled 622,004t in the first quarter, down by 21.2pc year on year, according to trade data. March imports were up by 46pc from the previous month at 254,660t, but down from 383,292t a year earlier.

Volumes from Australia revived in March, hitting 125,147t after dropping to zero in February.

March imports from Russia were roughly flat on a year earlier at 71,500t, but volumes from the US fell by 58.6pc year on year to 55,098t.

The UK's met coke imports fell to a six month low of 4.8mn t in March, of which almost 2mn t came from Poland. But the drop may have been fuelled by particularly high met coke imports in January-February, leaving March requirements low. Total first quarter met coke imports came to 67,520t, up from 14,108t a year earlier.

The UK did not receive any Colombian met coke in March, but took a combined 43,166t in January-February, compared with none in the first quarter of 2018. Trade data does not show any Chinese met coke arriving in the UK since December.

UK crude steel production actually rose in the first quarter, by 7.5pc to 2mn t, according to the World Steel Association, of which Argus estimates that around 17pc would be produced through the EAF route. But slipping raw material imports during the period potentially point more towards second quarter steel production plans, and growing caution about the regional steel outlook. European coking coal market participants have described a cautious approach to restocking since late-2018, with mills keen to see how steel fundamentals develop before committing to much extra supply.

UK flat steel market participants voiced uncertainty about the direction of their market throughout the first quarter, with a lack of clarity about Brexit, steel demand, pricing and the pound's volatility all encouraging more hand-to-mouth buying.

The Argus weekly ddp West Midlands assessment for hot-rolled coil is at £447.50/t today, down by £45/t since mid-February.