Atlantic coking coal: Signs of interest emerge
US coking coal prices held steady today on early signs of buying interest returning in Europe and stronger demand in Asia.
There is little to no European spot activity this week but participants remain hopeful that easing lockdown restrictions and falling Covid-19 infection rates and deaths in some countries point to the possibility of spot demand returning as soon as May. A spate of buying in China in a tight Asia-Pacific market has also supported prices but it is still unclear if this demand is sustainable in the longer term.
The Argus daily assessment for fob Hampton Roads low-volatility coking coal is flat on the day at $127/t today, but down by $1.50/t from a week ago. The high-volatility type A and high-volatility type B prices remained stable at $127/t fob Hampton Roads and $128/t fob Hampton Roads respectively.
While prospects of a swift recovery for Europe's steel industry remain uncertain, a US mining firm said mills in Italy, Germany and Turkey have requested seven-day advancements of laycans, while a mill in Brazil was heard to advance the laycan of a cargo but slightly reduce the volume. But most adjustments to shipments have been reductions or delays. One mining firm said every customer had made some form of adjustment, although these varied widely. A Europe-based trader held the view that blast furnace recovery will be slow and cautious, raising little risk of a raw materials shortage. But he added that "mills are hesitant to postpone cargoes and unwilling to cancel, they want to keep their suppliers prepared at the moment".
"German mills might bounce back earlier as they seem to have a decent grip," one miner said.
Italian steel service centres restarted late last week but actual steel demand is yet to appear and any requirement is only coming from essential sectors and on a hand-to-mouth basis. But there are expectations that the automotive sector in Italy may resume as soon as May.
Some market participants are less optimistic and do not expect to see any spot interest from a major European steelmaker until June at least.
One market participant said Chinese buyers had been "very active" in the past week, which indicates support for prices in Asia, which have otherwise been slipping. US and Russian sellers now depend heavily on China for spot sales, and a number of US mining firms have made sales in the past few days. But "Australian mines are not going to volunteer any output cuts, and there are probably even more US cuts down the road", one miner said. A significant number of US mines have halted or reduced production in the last couple of weeks. Consol Energy resumed output at its Bailey mine in Pennsylvania yesterday but closed production at the nearby Enlow Fork mine because of "weak coal demand" and the general economic slowdown. The company did not say when it might reopen Enlow Fork.
Colombian mid-volatile material was assessed at $114.75/t yesterday, down by $2.55/t on the week. Despite quarantine restrictions affecting some mining firms in Colombia, there is some availability on the market, with mid-volatile material heard to be offered into the Asian market for May-June shipment.
Freight rates in the Atlantic have remained under pressure amid strong availability and a lack of demand for coal shipments. The US east coast to Rotterdam Panamax rate is assessed at $6.50/t, the lowest for the year to date and down by 25¢/t from a week ago.
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India faces tricky decision on steel imports
India faces tricky decision on steel imports
Mumbai, 5 August (Argus) — Indian steelmakers have ratcheted up calls for restrictions on imports from China and Vietnam to shield domestic industry from significant harm. But the decision on whether to impose anti-dumping duties or other curbs is likely to be a challenging one for the government, industry sources said. Major domestic mills have urged the government to limit flows from China, as elevated production levels and low local demand prompt the country's mills to keep exporting finished steel at prices significantly below those of domestic Indian material. India became a net importer of finished steel in the April 2023-March 2024 fiscal year, with shipments from China rising by 91pc on the year to 2.7mn t. In April-June this year, China shipped 572,000t of finished steel to India, an increase of 40pc on the year, according to data from the steel ministry's joint plant committee. The Argus fob China hot-rolled coil (HRC) index fell to a four-year low of $476/t at the end of July. HRC offers from China were last reported at $520/t cfr India, although trading firms said there was no buying interest yet at these levels. "China is not competitive. They lose money at these prices. It's predatory pricing, which is detrimental to the future of the industry in India," said Tata Steel's chief executive, TV Narendran, during the company's earnings call. JSW Steel and Jindal Power & Steel have also highlighted pressure from rising Chinese imports, as well as inflows from countries with which India has a free-trade agreement (FTA), such as Vietnam. Vietnam has been a main market for Chinese exports, and a dumping investigation could also be on the cards here. After rising in April and May, domestic Indian HRC prices have been on a downward trajectory, largely because of import bookings. The Argus weekly Indian domestic HRC assessment for 2.5-4.0mm material was 50,800 rupees/t ($603/t) ex-Mumbai on 2 August, excluding goods and services tax, a fall of Rs2,950/t compared with the end of May. No losses for steelmakers While domestic steelmakers' profits have come under pressure, sources say they have not been running into losses yet. JSW Steel's profit fell by 64pc on the year in the quarter ending 30 June, while Tata Steel's first-quarter profit after tax from its India operations declined by 33pc on the year. "The government should not wait for steelmakers to run into losses. Some action must be taken before that happens," an executive at a major Indian steel mill said. The Indian government last imposed anti-dumping duties on imported steel in 2017 , with the threshold for the landed cost of HRC at $489/t. This netted back to $430-440/t fob, an industry source said, adding that Chinese prices still have not fallen to this level yet. "If prices come precipitously close to the levels seen in 2016-17, there would be a definite problem," the source said. While imposing restrictions on imports could benefit Indian mills, any increase in steel prices would also mean additional costs for the infrastructure sector, sources said. The Vietnam question Several sources suggested that restrictions on Vietnamese steel would have a larger impact on domestic prices than curbs on China. Importers of Vietnamese steel do not incur additional duties on the landed price, unlike buyers of Chinese steel, because of India's FTA with ASEAN countries, including Vietnam. There is also talk that Chinese steel is rerouted to India through Vietnam. Finished steel exports from Vietnam to India more than doubled on the year to 737,000t in the 2023-24 fiscal year. Import bookings have increased since Vietnamese steelmaker Formosa Ha Tinh's export licence was renewed by the government's Bureau of Indian Standards (BIS) in May. Latest offers from Formosa were heard at $550/t cfr India. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Market sweats potential EU HRC retroactive duties
Market sweats potential EU HRC retroactive duties
London, 5 August (Argus) — The potential imposition of retroactive anti-dumping duties on hot-rolled coil (HRC) imports into the EU could affect trade sooner than anticipated. The European Commission will formally announce its anti-dumping case on Egypt, Japan, India and Vietnam this week, after Egypt — the final country to receive diplomatic notice of the case — received its note over the weekend. The formal announcement will probably be made in the EU's official journal on 8 August, sources in Brussels said. European steel association Eurofer has pushed for imports from the four countries to be registered and for retroactive duties to be imposed. Retroactive duties have rarely been imposed in EU steel trade cases, although the commission did take this path in its case against Russian and Chinese cold-rolled coil imports in 2015-16. Retroactive duties are typically imposed 90 days prior to provisional measures taking effect, but this is only possible if imports are registered. The final decision over retroactive duties will be taken at the definitive stage of the investigation. Should the case start on 8 August and provisional duties be imposed after eight months — as is typically the case where dumping is proven — retroactive definitive duties could be imposed on imports dating back to January 2025. This would mean material from these countries clearing customs on 1 January are unlikely to face anti-dumping duties, but imports clearing customs after this date carry the risk of definitive duties, should dumping be proven and retroactive duties are imposed. HRC trade has been slow in recent weeks, owing to a seasonal slowdown in demand. Service centres are opting to manage their inventories and preserve cash flow, rather than restocking. But this could be the best time to make purchases, given the potential impact to imports the possible duties may bring, sources suggest. The countries covered in the case represent more than 50pc of EU HRC imports this year so far . "At this price level... the risk of increases is far higher than the risk of going down," one trading firm said. Another trading source did not understand why EU mills were not being firmer on pricing. Argus ' north European HRC index has fallen by €30.75/t ($34/t) since the start of June, to €604.75/t ex-works on 2 August, while the Italian index dropped by €29.75/t to €600.75/t over the same period. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Newcastle coal ship queue increases
Australia’s Newcastle coal ship queue increases
Sydney, 5 August (Argus) — The shipping queue outside the key Australian coal port of Newcastle hit a two-year high of 41 vessels on 5 August, despite higher throughput at the Port Waratah Coal Service (PWCS) terminals. The average vessel turnaround time in July at PWCS eased to 7.38 days from a 22-month high of 7.61 days in June as exports increased but the shipping queue grew on increased arrivals. The PWCS terminals' shipments rose to 8.61mn t in July from 7.9mn t in June but was down from 8.79mn t in July 2023, according to PWCS data. There was no maintenance planned for July but the port of Newcastle was hit by storms and rough seas during the month. There is a major rail maintenance programme under way during 3-6 August . Newcastle Coal Infrastructure (NCIG) does not release data for its terminal at Newcastle, while the Port Authority of New South Wales has not yet released overall data for July. Newcastle shipped 12.28mn t in June, up from 11.77mn t in May. This implies that NCIG shipped 4.38mn t in June. Newcastle shipped 73.2mn t during January-June, up from 67.98mn t for January-June 2023, according to port data. By Jo Clarke PWCS coal loading data Jul '24 Jun '24 Jul '23 Jan-Jul '24* Jan- Jul '23* PWCS loadings (mn t) 8.61 7.90 8.79 56.39 52.92 PWCS stocks (mn t) 2.25 1.60 1.53 1.57 1.46 PWCS turnaround time (days) 7.38 7.60 2.88 4.66 2.13 Newcastle ship queue (vessels) 41 31 13 23.57 10.57 Source: PWCS * PWCS loadings is a total YTD, all others are average per month YTD Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China to set hard targets for curbing CO2 emissions
China to set hard targets for curbing CO2 emissions
San Francisco, 2 August (Argus) — China is planning a shift in the way it controls greenhouse gases, specifically carbon dioxide (CO2) emissions, in a move that could support progress in its national emissions trading scheme (ETS), although it is unclear what emissions levels will be targeted. The country currently measures CO2 against economic growth, or emissions per unit of GDP in what is known as carbon intensity. This allows it to tout progress despite rising emissions so long as these do not rise faster than GDP. But it plans to change this. Beijing aims to incorporate CO2 indicators and related requirements into national plans and establish and improve local carbon assessments in a goal to improve CO2 statistical accounting. This will affect sectors including the power, steel, building materials, non-ferrous metals, and petrochemicals sectors, according to a state council work plan issued on 2 August. It will evaluate CO2 emissions of fixed asset investments and conduct product carbon footprint assessments while local governments will implement provincial carbon budgets that could enter trials in 2025. The latter will involve a wide range of industries including oil, petrochemicals, coal-to-gas, steel, cement, aluminium, solar panels manufacturing and electric vehicles, among others. Beijing is hoping such measures will allow it to set hard targets for CO2 emissions from 2026-2030, although the government will still prioritise intensity control in the meantime in what it calls a ‘dual-control mechanism' — switching from controlling intensity to actual emissions of CO2. Provinces are expected to be allowed to further refine this dual control mechanism, suggesting it will may give localities some leeway to adjust. China's ETS currently includes only the power sector due in large part to challenges collating accurate CO2 emissions data from other sectors, although it is expected to include other sectors like aluminium into the scheme soon. China unveiled new regulations for its ETS earlier this year, aiming to crack down on falsification of data. It sees the ETS as a tool to help it meet a goal to peak carbon emissions before 2030 and reach carbon neutrality before 2060. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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