The Atlantic coking coal market is quiet this week, as several participants expected to take a wait-and-see approach until after summer. But this quarter's cautious recovery in sentiment and expectations of a stronger fourth quarter have continued to support US low-volatile and high-volatile A coals.

 

Capacity cuts in the second quarter have allowed other mining firms to avoid reducing their high-volatile B prices and to sit out the market weakness instead. "We would need a spot price well above today's level to want to participate. It might be a different story if we were sitting on high inventories," a source at one firm said.

 

Optimism in Europe's steel industry has been cautious, with up to two mills securing small lots for the third quarter. "We have bought small cargoes here and there, just to adjust supply and demand," a source at a northwest European mill said, "and it hasn't been good quality coal." Otherwise, European third-quarter requirements have been largely met under term contracts. But US mining firms are optimistic that European buyers have maintained their shipping schedules. "We are encouraged by what we see out of Europe so far and more recovery can be expected with the Covid-19 rescue fund deal agreed by the EU," a source at one firm said.

 

Tata Steel today announced a €55/t increase in steel coil prices from 1 October, following its £50/t ($71.11/t) hike for UK customers in mid-July. ArcelorMittal last month announced a higher ex-works base price for hot-rolled coil in northwest Europe.

 

US mining companies hope that European buyers will return to the market when summer is over. Some buyers are waiting to see if prices fall further, a source at one mining company said.