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Europe steel buyers in no rush to close deals after Q3 HCC rollover

Increase font size  Decrease font size Date:2014-07-03   Views:463
Europeans steelmakers had long argued for a rollover in coking coal contract pricing for this quarter and after seeing the outcome at $120/mt, unchanged on Q2, are not in a hurry to close deals.

A focus on costs due to low steel pricing, and an abundance of options for using second-tier coking coals or usage of other non benchmark-specific contracts running as long as a year, especially for US high-vols, is seen in Europe.

"It was quite expected, the market had not been moving much recently and China is not driving the market any longer," said a buyer at a Northwest European steel producer of the $120/mt rollover.

The monthly average for Platts Premium Low Vol of $122.86/mt CFR China has been almost identical to Monday's assessment of $122.50/mt CFR China.

A higher quarterly settlement price such as $123/mt had been talked about, but with the rollover prevailing this may be easing buyers. However, one source said he was in no rush to settle, and may be able to achieve lower prices than $120/mt for premium grades.

Another was more exposed to monthly pricing, and in the case of the US, longer-term pricing.

The gap with spot prices was still too high, at around $9/mt, and the option to use index fallbacks in some contracts was attractive, a source said.

Miners other than BHP Billiton-Mitsubishi Alliance are offering an index fallback or other flexible terms rather than tying pricing to the benchmark, he added.

BMA is not yet heard to offer European buyers August pricing for monthly contract cargoes.

There is some heavier discounting going on for BMA non premium coking coals into the region while there is no need to do this for its premium brands, a source said.

 
 
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