Northern Appalachian producers are working to cash in on a bump in near-term pricing thanks to robust export demand and tightness in 13,000 Btu/lb coal supply.
NAPP producers and traders said Friday that continued strong calls for fourth-quarter 2017 and Q1 2018 seaborne delivery from Europe are pushing up values despite a sluggish domestic market. Prompt export demand coupled with production slowdowns at a pair of high-volume mines have combined to create a window of elevated prices many market players don't expect to last long.
"There's no doubt you want to take advantage in what we've seen as a spike in prices," one producer said. "Exports have been stronger than steady, and we're excited that there could be some real opportunities after the first quarter, but it's really hard to know what prices will be then. Everybody expects they'll be down, so, yes, you're trying to get what you can get done now."
NAPP supply has shrunken recently in large part because of forced production stoppages at CNX Coal's Bailey Mine and Contura Energy's Cumberland Mine. Mining was halted at Cumberland because of a roof collapse similar to rock falls experienced at ERP Fuels' Federal and Oak Grove mines this year. Bailey's output slowed after permitting issues prevented the start of a panel, which led to a weeks-long move of the longwall to start a another panel.
Multiple sources said the new longwall was started early this week at Bailey, but CNXC officials did not return a call seeking comment.
Sources reported pricing for 13,000 Btu/lb coal has increased into the $46.50-$48/st range through early 2018 delivery, with some deals reaching as high as $49/st.
Platts last assessed Pittsburgh Seam-quality coal (13,000 Btu/lb, 4 lb SO2/MMBtu) at $47/st for Q1 2018 delivery, up $1 from the previous week.
One trader noted that Indian buyers are now looking at 6,000 Kcal/kg NAR, 2.5% sulfur coal because of the tightness in the US 6,900 Kcal/kg NAR market.
The trader reported three 130,000 mt cargoes of 6,000 Kcal/kg NAR coal to India for November and December loading were sold at $88-$89/mt CFR. The trader added that US 6,600 Kcal/kg NAR coal is being offered at about $69/mt FOB for loading from Baltimore, with a Capesize freight rate at about $27-$28/mt.
