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Analysis: U.S. Export Met Coal Pricing Weakens on Atlantic Steel Prices, Trade Tariff Fallout

Atlantic met coal export markets have been hit by weaker steel prices and lower steel mill utilization rates gathering pace through the first half of the year, pushing down U.S. export coking coal spot prices and demand as trade tariffs hit markets, according to analysis by S&P Global Platts Monday.

U.S. met coals' relative pricing weakened against Australian premium HCC over several periods in the first half of 2019, with prices continuing to fall into July.

Outright U.S. met coal prices largely did not reach the $210/mt plus FOB price highs in premium HCC in the first half of 2019, with premium spot prices supported by surprisingly strong Chinese steel output in Q2 2019 and resultant coke demand and coal to coke margins.

U.S. high-vol A saw the highest prices for main U.S. East Coast coals: relativities to TSI Premium HCC fell to a low of 96.4% in May, with an average of 97.5% for H1 2019, down from 97.75% in H2 2018.

High-vol A prices averaged at $199.46/mt FOB in H1 2019, compared with $199.07/mt in H2 2019.

The more widely traded U.S. high-vol B, which typically trades at the biggest differential to premium met coals, saw its spread weaken further, as more U.S. supply competed for export sales.

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Andy Beshear Promises to Find Answers to Blackjewel Miners

Earlier this week, Blackjewel LLC filed for bankruptcy. Since then, Eastern Kentucky miners have suffered as their cashed paychecks suddenly bounced, leaving many with no money to feed their families.

On Wednesday, a federal judge approved a $5 million lifeline to help the company as it deals with bankruptcy, on one condition - that CEO Jeff Hoops resigns.

A Blackjewel employee who identified himself only by the first name Dave asks Gov. Mark Gordon what he will do to hold Blackjewel CEO Jeff Hoops accountable for the closure of the Eagle Butte and Belle Ayr mines during a public meeting Tuesday in Gillette.

Photo by Josh Galemore, Casper Star-Tribune

Attorney General Andy Beshear said on Friday that he has heard numerous complaints related to the Blackjewel bankruptcy, and released the following statement:

“My job is to protect Kentucky families and ensure our workers are treated fairly and with the dignity they deserve. In the last several days, my office has received numerous troubling complaints related to the Blackjewel mining company ranging from clawed-back paychecks to child support issues. I have therefore instructed my office to use all of its powers and resources to seek answers for those who have been harmed. No Kentuckian should put in an honest day’s work only to have their paycheck taken away and their livelihood disrupted.”

To continue reading, click here to view the full article on CoalZoom.com. 

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Global Energy Demand Can Only Increase

There’s an unimaginable urbanization boom occurring around the world that means more energy use.
We, of course, don’t see much of it here in the West, but global cities swell in population by some 80 million people every year: e.g., the rise of the “megacity” with 10 million residents.

Basically all population growth in the decades ahead will take place in urban areas, all of which will be in the still developing nations (non-OECD), where poverty and insufficient access to energy is far more rampant than our worst nightmares could ever imagine.


The world is increasingly urban, meaning more money and more energy.

Data source: UN; JTC

And just look to the West to see why urbanization is desirable.

The rich, developed nations have urbanization rates of 85% and above, versus less than 40% for some of the world’s massively populated countries, such as India and Bangladesh.

The world today is only 55% urban, and that will rise to 75% before 2050.

No wonder: moving to a city brings greater employment prospects, more educational opportunities, better health care, more access to cultural activities, and an overall higher quality of life.

To continue reading, click here to view the full article on CoalZoom.com. 

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 Met Coal Coke Market Creaks Under Oversupply

The metallurgical coke market is showing signs of strain from oversupply as steel production cuts bite, with mills in multiple countries actively offering or considering whether to sell excess material.

Some European mills are said to be weighing up how to approach their own met coke production after the region's steel woes escalated in the second quarter. Several have recently been seen offering coke into the merchant market — sometimes just small lots of around 5,000t — not necessarily with a strong intention to sell but more to see whether they could in theory achieve a good price, and therefore whether or not to trim their own coke production.

This dipping into the merchant market on the sell-side follows a Canadian steelmaker's more concerted effort to sell 40,000t of met coke a few weeks ago, and aligns with talk of oversupply across the Atlantic and Americas.

To continue reading, click here to view the full article on CoalZoom.com. 

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U.S., Canadian Coking Coal Exporters Eye SE Asia

U.S. and Canadian coking coal exporters are eyeing emerging growth markets in southeast Asia with increasing interest, with some in early-stage discussions with buyers in Vietnam and Malaysia.

Data from the U.S. Census Bureau does not show any coking coal going towards Vietnam or Malaysia historically. Canadian trade data show 497,408t of coking coal heading to Vietnam in January-May — down from 590,748t a year earlier — and none going to Malaysia.

But some U.S. and Canadian coking coal producers are now looking at these markets more closely, drawn in by ambitious steel production growth projections and also seeking opportunities to diversify sales while several traditional export and domestic markets come under pressure.

"We are in talks, it's an area under development," one Canadian coking coal producer said, adding that no sales to Vietnam or Malaysia have been made yet.

To continue reading, click here to view the full article on CoalZoom.com. 

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