NEW YORK U.S. coking coal
quarterly export prices are expected to hold steady in the
fourth quarter as the European financial crisis and competition
from increased supplies out of Australia keep a ceiling on
export tags, coal sector analysts told AMM sister
publication Metal Bulletin.
Coking coal prices were at about
$225 per tonne in the third quarter, up from $206 per tonne in
the second quarter, and are expected to stay there for the
fourth quarter, analysts said.
"I assume benchmark
metallurgical coal prices will stay flat at $225 per tonne in
the third and fourth quarters," Kuni Chen, managing director
for metals, mining and coal analysis with CRT Capital Group
LLC, told Metal Bulletin.
"There is some modest downside
risk to prices, based on higher supplies out of Australia and
slowing global growth trends ... (but) good-quality
metallurgical coal in the United States will continue to be in
demand. We assume fairly stable steel utilization rates, in the
75 to 80 percent range, in the second half of the year," he
David Beard, managing director
of coal and shipping research with Iberia Capital Partners,
"The stock market is very
worried about coking coal benchmark pricing declining by the
fourth quarter or into 2013, (but) the third-quarter benchmark
price of $225 per tonne seems pretty firm at this juncture," he
The expectation of steady
quarterly export pricing in the fourth quarter comes despite
continued uncertainty in Europe. European steel mills that
operate blast furnaces have slowed down purchases of U.S.
coking coal due to widespread production cuts, fueled by
plummeting steel demand from weary consumers who have been
taking a wait-and-see approach to buying.
"I would estimate that, in the
third quarter, around 16 of the 74 blast furnaces in Europe are
either idle or in the process of being idled," said Andrew
Jones, a coal analyst at Resource-Net.
European steel mills kept coking
coal stocks low in the first half of 2012 to avoid a surplus of
material, as was seen in 2009, he said.
Nonetheless, "on coking coal
exports, the United States has been doing well in volume terms
compared with both Australia and Canada," Jones said. "U.S. met
coal exports were up by 21 percent year-on-year in April,
compared with just a 2-percent increase for Australia and 7
percent for Canada."
Meanwhile, demand for coking
coal from the U.S. domestic market remains good, supported by
vibrant demand from the countrys automotive market.
U.S. sales by the top seven
carmakers were 6.26 million vehicles in the first six months of
the year, up 14.6 percent from nearly 5.47 million units in the
corresponding period last year.