More splits emerge in Asia quarterly PCI pricing system

: Coking coal
18/07/31

South Korean steel producer Posco has settled April-June quarter pulverised coal injection (PCI) contracts at $139.50/t fob Australia for low-volatile Foxleigh PCI. The settlement was reached with Australian producer Realm Resources.

But the agreement has been rejected by a few other northeast Asian steelmakers, led by Japan's Nippon Steel & Sumitomo Metal (NSSMC), which are still pushing towards a lower price. This is despite two months having passed since initial negotiations began, and a month since the quarter ended.

Posco broke from convention to form an independent deal with Realm Resources for the April-June quarter. It has also settled July-September contracts for Foxleigh PCI at the same level of $139.50/t in order to avoid a repeat of the drawn-out negotiations in the next quarter.

"Nippon Steel is not likely to follow the Posco settlement at this moment and is still discussing a deal with suppliers," a Japanese trader said. "But it seems like a good move to delay the settlement since spot PCI prices are falling now."

Fellow Japanese producer JFE Steel has formed its own system of PCI quarterly contract negotiations in the past year, following a more traditional model in which it aims to set prices ahead of the start of the quarter. NSSMC and others have instead aimed to settle by the end of the quarter using guidance from an average of premium hard coking coal index prices.

JFE Steel settled PCI contract prices for the July-September quarter more than a month ago, at $150/t fob Australia with Australian producer Peabody for Coppabella PCI. But Posco, NSSMC and others may benefit from the delays, as spot PCI prices have undergone a correction over the past several weeks, dropping from $143.80/t fob Australia on 22 June to the current Argus assessment of $120/t for low-vol PCI.

"Knowing the settlement price before the quarter begins is always appreciated by the producer and can help secure volumes, but Japanese steelmakers have a lot of bargaining power because they are just a small group of primary buyers," another Japanese trader said.

The continuing talks between NSSMC and Australian PCI producers are focusing on the $135-140/t fob Australia range for April-June, officials close to the negotiations said.

But having three different settlement prices for July-September contracts between the five major Japanese and Korean steelmakers does not augur well for the recovery of a PCI benchmark system, just 18 months after a similar system collapsed in the hard coking coal market to be replaced by indexation.

"The benchmark system has become much too complicated, if we should even call it a benchmark system anymore," the trader said.

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/04/09

Peabody reviews Anglo's Australian coal assets buyout

Sydney, 9 April (Argus) — US coal producer Peabody Energy is reviewing its decision to buy UK-South African mining firm Anglo American's coking coal assets in Australia, following a blast at Anglo's Moranbah North mine, the company said today. Peabody Energy agreed to buy four of Anglo American's mines — Moranbah North, Grosvenor, Aquila, and Capcoal — in a $3.8bn deal signed in November 2024 . The Moranbah North blast could trigger an adverse event clause in the acquisition contract, allowing Peabody to withdraw from the deal at a minimal cost, market participants told Argus on 9 April. This has not been confirmed by Peabody. The company said it remains in conversation with Anglo American to better understand the impacts of the event. Two of Anglo American's Australian coking coal mines, Grosvenor and Moranbah North, are currently non-operational because of safety issues. Resources Safety and Health Queensland (RSHQ) — one of Australia's mining regulators — shut Moranbah North after a suspected carbon monoxide explosion on 31 March. Anglo American declared force majeure on coking coal from Moranbah North on 3 April in a notice backdated to the day of the blast. Anglo American's 5mn t/yr Grosvenor mine has also been non-operational since July 2024, when a fire severely damaged the underground site. The company did not disclose a reopening timeline for the site in its 2025 production guidance released in February. The firm previously shut the Grosvenor site over March-May 2022 after a fatal accident. Anglo American is not the only coking coal miner currently dealing with safety challenges. Australian producer GM³ halted production at its 3mn-3.5mn t/yr Appin mine in New South Wales on 6 April, following a blast that injured four workers. The company and state regulators are investigating the incident, with Appin closed until further notice. Argus ' metallurgical coal premium hard low-vol fob Australia has been falling over the past month, dropping from $183/t on 10 March to $174/t on 8 April. But the price rose from $166/t on 3 April to $174/t on 4 April after Anglo American declared force majeure on Moranbah North shipments. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump issues executive orders to boost coal

25/04/08

Trump issues executive orders to boost coal

Cheyenne, 8 April (Argus) — US president Donald Trump signed four executive orders today aimed at increasing the country's coal production and use, including directing agencies to possibly expand access to federal land and use emergency authority to keep coal-fired power plants open. The orders follow up on a pledge Trump made on 17 March to authorize his administration "to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL." At the time of Trump's social media post, the White House did not elaborate on his plans. The executive orders signed today are primarily focused on US coal use and production. These include directing the chair of the National Energy Dominance Council to designate coal as a "mineral" covered under a previous executive order signed in March that uses emergency power granted under the Federal Power Act to fast track permit reviews for critical mineral projects. Today's orders also direct agencies to revoke policies that aim to move the US away from coal production or favor other generation resources over coal. This includes authorizing the Department of Justice to investigate state policies considered to be prejudicial against coal. The orders also direct agencies to identify coal resources on federal land and prioritize coal leasing on those lands, and orders the Secretary of the Interior to make it clear that a moratorium on federal coal leasing that was initially in effect from 2016-17 and reinstated from 2022-24 is no longer active. Trump also signed a proclamation allowing some coal plants to comply with a less stringent version of the EPA's mercury and air toxics standards for two years. Another order signed today directs the Secretary of Energy to "streamline, systemize, and expedite processes for issuing emergency orders under the Federal Power Act during forecasted grid interruptions." "We're slashing unnecessary regulations that targeted beautiful, clean coal" and "will end the government bias against coal", Trump said today before signing the orders at an event featuring coal miners and lawmakers from coal-producing states. The US is "going to produce energy the likes nobody has seen before." He said his administration is going to devise a "guarantee" that will ensure the industry and investment in coal projects will be protected from "the ups and downs" of politics, but did not elaborate on what that would be. Other parts of the orders have the Council of Environmental Quality assisting agencies in making some exclusions for coal under the National Environmental Policy Act, encourage coal-fired generation for artificial intelligence and call for the Secretary of Energy to consider whether coal used for steel production can be defined as a critical mineral. The orders also aim to promote coal and coal technology exports, including by possibly facilitating international offtake agreements for US coal. US coal exports rose in 2023 and 2024 but trading activity has faltered lately amid restrained steel production, limited coal-fired generation in some countries and uncertainty over recent tariffs and the US Trade Representatives proposal to charge Chinese-built and operated ships that do business in the US. The National Mining Association praised Trump's actions. "It's a stark shift from the prior administration's punitive regulatory agenda, hostile energy policies and unlawful land grabs," NMA chief executive officer Rich Nolan said before Trump signed the order. But environmental group Sierra Club warned the order will be costly. "Forcing coal plants to stay on line will cost Americans more, get more people sick with respiratory and heart conditions, and lead to more premature deaths," Sierra Club executive director Ben Jealous said. By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's Simcoa may buy carbon credits until 2028

25/03/21

Australia's Simcoa may buy carbon credits until 2028

Sydney, 21 March (Argus) — Australia's silicon producer Simcoa will likely need to buy and surrender Australian Carbon Credit Units (ACCUs) until 2028 for safeguard mechanism compliance obligations before it completes a key decarbonisation project, it told Argus today. The project was awarded federal funds on 20 March. Australia's federal Labor government granted Simcoa A$39.8mn ($25mn) under its Powering the Regions Fund (PRF) to expand charcoal production at its Wellesley facility in Western Australia (WA) and remove the use of coal in silicon production. The project is expected to reduce the company's scope 1 emissions by around 90pc, or approximately 100,000 t/yr of CO2 equivalent (CO2e). Simcoa is Australia's only silicon manufacturer, which is a key component of solar panels. The funding will help maintain silicon manufacturing capability in the country in addition to cutting emissions, energy minister Chris Bowen said. The company currently uses 35,000 t/yr of metallurgical low ash coal in its operations, and anticipates usage will drop to zero after it doubles its charcoal production capacity by 25,000 t/yr to 50,000 t/yr. The completion date for the expansion is not expected before 2028. The firm may continue to buy [ACCUs] as it must use coal as a reducing agent for part of its production for calendar years 2025-27, or until the expansion project can be commissioned, the company told Argus on 21 March. Simcoa surrendered 22,178 ACCUs in the July 2022-June 2023 compliance year as it reported scope 1 emissions of 122,178t of CO2e with a baseline of 100,000t CO2e at its Kemerton silicon smelter. Figures were lower for the July 2023-June 2024 compliance period, the company said, without disclosing details. Australia's Clean Energy Regulator (CER) will publish 2023-24 safeguard data by 15 April . Simcoa anticipates scope 1 emissions at the Kemerton smelter to be "considerably below" the baseline once the charcoal expansion is completed and could make it eligible to earn and sell safeguard mechanism credits (SMCs), which traded for the first time in late February . "We will take whatever opportunity is available to us," the company said on potentially holding or selling SMCs in future. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's New Hope boosts coal output in Aug-Jan

25/03/18

Australia's New Hope boosts coal output in Aug-Jan

Sydney, 18 March (Argus) — Australian coal producer New Hope increased its thermal coal production by 33pc on the year over the first half of its financial year, August 2024–January, while increasing its exposure to the coking coal market. New Hope raised the production rate at its Bengalla thermal coal mine in New South Wales (NSW) to 13.4mn t/yr of ROM coal towards the end of August 2024-January, in line with previously announced plans but below the site's approved capacity of 15mn t/yr. The company mined 4.2mn t of saleable coal at the NSW mine over that period, allowing it to maintain its Bengalla guidance for the 2025 financial year ending 31 July at 8.1mn-8.7mn t of saleable coal, in its half-year financial report. To the north of the site, in Queensland, New Hope produced 1.2mn t of saleable coal at its New Acland thermal coal mine over August-January, up from just 300,000t from a year earlier. The company only mined 1mn t of saleable coal at the mine over its 2024 financial year, ending 31 July 2024. New Hope also negotiated a legal settlement with the Oakey Coal Action Alliance (OCAA), an activist group that had been opposing New Acland's ramp-up, on 13 January. The company's settlement enabled it to maintain New Hope's 2025 guidance at 2.8mn-3.2mn t of thermal coal. But some of New Acland's coal exports may have been delayed by Cyclone Alfred in March, despite its production and legal successes over August-January. The Port of Brisbane , which handles exports from the site, closed for almost a week as the extreme weather system hovered off the coast of Queensland. New Hope also increased its ownership stake in publicly traded coking coal producer Malabar Resources, from 20pc to 23pc, over the last half-year. New Hope diversified its operations as coal prices started falling. Argus ' Australian pulverised coal injection (PCI) and thermal coal prices have been sliding over the last three months. Its coal 6,000kcal NAR fob Newcastle price hit $100/t on 17 March, down by 24pc from $131/t on 17 December, while its PCI low-vol fob Australia price slid by 18pc over the same period. By Avinash Govind Saleable Coal Production mn t August-January 2025 August-January 2024 August 2023 - July 2024 y-o-y Change (%) Bengalla Mine 4.2 3.8 8.0 11 New Acland 1.2 0.3 1.0 300 Total 5.4 4.1 9.1 33 New Hope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico factory contraction extends into February

25/03/03

Mexico factory contraction extends into February

Mexico City, 3 March (Argus) — Mexico's manufacturing sector contracted again in February, according to the latest purchasing managers index (PMI) survey from the finance executive association IMEF. The manufacturing PMI rose to 47 from 46 in January, marking the 11th consecutive month below the 50-point threshold between contraction and expansion. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose 1.6 points to 44.6, still deep in contraction. Similarly, production rose 2.8 points to 45.6. The employment index fell half a point to 46.4 in February, now in contraction for 13 consecutive months. Both manufacturing and non-manufacturing PMIs increased slightly in February but remained in contraction territory. The non-manufacturing PMI — covering services and commerce — increased slightly to 49.5 in February from 49.2 in January, staying in contraction for a third consecutive month. Non-manufacturing new orders rose 1.3 points to 49.4, production increased 1.6 points to 49.1 and employment fell slightly to 48.4 from 48.6, all in contraction. Victor Herrera, director of economic studies at IMEF, described the upticks on both PMIs as fluctuations, with the statistical "trend line in both PMIs showing we are moving further into contraction." With US president Donald Trump's tariffs on imports from Mexico set to begin Tuesday, IMEF warned they could severely impact industrial production and financial stability in Mexico. "This is a sign of further bad news on growth in the short term," with uncertainty tied to looming US tariffs on Mexican goods weighing on investment and industrial activity, Herrera said. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more