January 23, 2021 - US coking coal prices were largely flat at the end of this week as Chinese buying continues to ease ahead of the lunar new year holiday, while European mills remain focused on term discussions.

The Argus assessed US low-volatile prices edged down by 50¢/t to $156/t fob Hampton Roads today as the China cfr price dipped further amid signs of Chinese demand easing. The high-volatile (high-vol) A assessment is unchanged at $151/t fob Hampton Roads, supported by ongoing supply tightness and expectations of steady demand. The high-vol B price is assessed flat as well at $127.50/t today, after moving down by $1.50/t yesterday, softened by growing expectations of improved availability in the second quarter.

The tier-one China cfr price eased downwards by 65¢/t to $210/t, with many Chinese buyers absent from the market as demand typically slows ahead of the lunar new year holiday, which starts on 12 February. A Panamax cargo of Canadian Wolverine hard coking coal for March-loading was understood to have been sold by a trader to a north China mill at $208-210/t cfr yesterday. US miners are optimistic that Chinese interest in US coals remains sustainable, even if restrictions are lifted on Australian material, as they continue to field enquiries from Chinese buyers for shipments for the rest of this year.

European mills are mostly tied up in term discussions with Australian and US miners, keeping spot interest limited for what remains for the first quarter. "We are still in discussions with US miners because they seem to still be bullish on the back of Chinese demand," said one European mill. "I am wary of making a commercial decision based on political tensions between countries," said the mill in reference to China's unofficial ban on Australian coals. Despite the strength in near-term steel prices, European mills remain cautious about the second half. While European mills have mostly brought blast furnaces back on line over the past six months, they have been careful to ramp up utilisation rates this year.

A Brazilian tender for 100,000t of high-vol A and 100,000t of high-vol B is in the process of closing today. The volumes have been divided among more than one producer. "I must say the negotiations are tough," said the mill, "the prices are higher than last year." The mill indicated that it would be buying in index terms with some discounts.

A Russian mining company sold a 30,000t cargo of K-grade coking coal with 7 FSI (Free Swelling Index) to a Chinese trader for $200/t cfr north China for mid-February loading from a far eastern port. The deal was $25/t higher than a similar cargo sold by the same miner in December.

Met coke supplies remain tight, with Colombian coke delivered to Europe indicated at above $400/t, while Chinese domestic prices remain on the upward track with a 14th price hike proposed earlier this week. Polish and Czech coke is offered at €230-240/t at the border with Germany for deliveries in the first quarter, with second quarter prices yet to be released. But market expectations are for prices to rise amid the global shortage.