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.

The Argus daily low-volatile price is unchanged today at $104/t fob Hampton Roads, as is the high-volatile A price, at $108.50/t fob Hampton Roads. The high-volatile B price fell by $1.50/t to $101/t fob Hampton Roads, weighed down by buyer expectations following a recent deal.

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 as a result of China’s tensions with Australia and the US, a source at one mining company said.

In the past week, the closure of the Chinese consulate in Houston and retaliatory closure of the US consulate in Chengdu has added another layer of difficulty for US firms trying to negotiate deals with Chinese buyers.

“Our mills in India have been slowly increasing output,” a steelmaker said, “but here in Europe, we are still at two thirds of capacity and not really raising output. The met coal market is in contango because people are expecting India to return, but even if that happens, things will still be depressed in Europe.”

Despite Covid-19 infections in India continuing to rise, US miners are positive about Indian demand after the monsoon season. “All our customers in India are looking to advance shipments,” one mining company said.