US met coal miners Contura Energy and Corsa Coal cited gradual improvement in US rail and port performance over 2018, aiding exports, at the Eurocoke conference in Amsterdam this week.
Flexibility at Corsa’s low-vol HCC mines in northern Appalachian to use both CSX and NS railways and several terminals aided trading and exports, and volume growth, VP for international sales Fred Cushmore said in a presentation at the event.
A combination of increased export demand in both met coal and thermal coal, freezing weather and rail scheduling changes, constrained access to slots for spot sales in particular last year, sources said. That had led to interest to barge down into the US Gulf and better utilize facilities in New Orleans.
“It took a year to iron out US logistics,” Contura’s senior vice president for met coal sales, Jason Fannin, said at Eurocoke in a presentation Wednesday.
There is plenty of port terminal capacity on the East Coast, he added.
Corsa saw opportunities for blend sales, with recent sales confirming Egypt as a strong market for US mid-vol blend.
Turkey remains purchasing US coals, even after slapping on import tariffs, with miners and traders competing for tenders as recently as last week.
Limited spot availability for main US met coal grades was confirmed by supply sources this week with much business settled for Q2, although some miners may reassess, basis eventual production levels.
One or two miners had expected extra tonnages for June loading still open for sale.
Contura picked up rights associated with the Indian Creek and Pocahontas #3 reserves held by the former low-vol HCC underground Pinnacle mines , and will extend the life of Contura’s Roadfork mine operating alongside, rather than look to materially raise output.
US miners commented on relatively stable output for now, especially for low-vol and mid-vols along with steady US domestic demand for coking coals, as inventory is built back up to meet steel demand.
US steel prices last year prompted high coke rates and purchasing plans to meet additional steel capacity utilization in 2019, has been seen in domestic deliveries to date, a supplier source said.
US market demand for coking coal in terms of annual volumes may be peaking this year, Cushmore said.
There may be limited potential to expand cokemaking in North America, with heavy steel supply competition from the larger US steel market segment for EAF-based steel, using scrap..
This ceiling in US demand, could facilitate further US export coking coal volumes.
After exports rebounded to around 55 million mt in 2018, up around 10% on 2017, exports may catch up with the peak in exports early this decade, Cushmore added.
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- On April 5, 2019