US met coal cuts follow weaker domestic, export demand

US-met-coal-cuts-follow-weaker-domestic-export-demand-4245.jpg      US met coal cuts follow weaker domestic, export demand

Lower benchmark seaborne coking coal spot prices and weaker demand this year in several export markets have started to close mines. US miners hoped for more resurgent contract demand at home in North America, and are facing weaker export demand as steel prices linger close to multiyear lows.

The conclusion of annual contracting for US and Canadian 2020 met coal deliveries at lower prices than offers first emerging in August may have been enough to push miners to idle some capacity.

Two miners, both privately owned, are already taking tons out citing market conditions, ahead of the third-quarter earnings season.

US pig iron output over the first eight months of 2019 is 4.5% below the year-earlier level, and Canadian production at mills in the Great Lakes is down almost 7% over the same period.

Without growth in regional coke demand and low steel margins, premium coking coal including high-vol A saw demand hit as lower cost coals compete at lower prices.

Key US export markets Europe and Brazil have suffered from falling pig iron output this year, which may have cut coking coal requirements.

Supplies from mines producing high-vol and premium mid-vol increased, with Illawara high-fluidity coal in New South Wales, Australia, ramping back up, and more Russian and Colombian high-vol and PCI offered into Europe and Brazil.

PCI prices fell more than coking coal, following declines in thermal coal, to encourage using more PCI and less coke at the margin.

Blackhawk Mining late Tuesday said it would idle several high-vol A mines due to weak global markets, affecting 1.3 million st, or just over 1 million mt.

Blackhawk is a major US high-vol hard coking coal miner operating 10 mining complexes, and produces several brands and grades including well-known Rocklick high-vol A.

Blackhawk is idling the Washington, Muddy Bridge and Buffalo mines, which are all underground and located in Logan County, West Virginia.

The No. 8 underground mine in Mingo County, a contract mine, was also idled.

Blackhawk’s plan includes idling the Fanco preparation plant and loadout facility and the Mingo 1 prep plant and Mingo 2 (Scaggs) loadout, located in Logan County and Mingo County, respectively.

The company had just had a new restructuring agreement agreed by the bankruptcy court this week, with higher liquidity provisions for the company to manage with lower coal prices.

Earlier, the miner planned to keep all existing operations running after restructuring.

Adjustments to operations have come soon after a decision by Murray Energy to idle high-vol A mine Maple Eagle.

Maple Eagle was recently acquired from assets auctioned after operator Mission Coal and group companies fell into bankruptcy.

Maple Eagle is an underground and surface operation, due for expansion under Mission and new owner Murray forging its own growth plan.

Underground mines without longwall mining plans typically have higher unit costs than other mines with larger output, or mines operating from resources at the surface, such as commonly seen in Queensland, Australia.

Some US mines can operate close to the top of the global cost curve, especially with rail-to-port costs under contracts, according to industry analysts.

This has put some mines at risk when prices fall, with spot seaborne coking coal prices trending at a three-year low on lower demand outside China.
Source: Platts

Orther News
Hi Guest | IP:
Help Desk
Ms. Thuy - Bulk
Ms. Dao - Project