US coking coal prices continued to track upwards today, buoyed by higher steel demand in Europe and fewer producers ready to offer heavy discounts to shift existing stocks. A recovery in Asia-Pacific prices on buying interest from India and China returning has further boosted prices since the start of this week.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal rose by $1.25/t to $106/t while the high-volatile A moved by up $1.50/t to $108/t fob Hampton Roads, supported by supply tightness and expectations that European mills will start looking to increase coke productivity. The high-volatile B price edged up by 75¢/t to $94.50/t fob Hampton Roads, driven by the overall strengthening in the market.

US miners are optimistic that the market has emerged from a trough and is headed for a stronger fourth quarter, with some European mills even seeking to advance their first-quarter term shipments into the fourth quarter. “We have one customer asking to have 170,000t shipped in the fourth quarter instead of their quarterly allocation of 100,000t, said one US miner. “We haven’t got the capacity to do that given strong demand. This could mean spot prices will be higher than term prices if there’s a flurry of customers seeking spot cargoes,” the miner added.”All of our European customers are either slowly increasing production or hoping to return to pre-Covid-19 levels in the next three months,” another US miner said.

Heavy restocking by the automotive sector, with hot-rolled coil (HRC) purchasing volumes back to around 90pc of pre-pandemic levels, has resulted in rising HRC prices since August. Yesterday, ArcelorMittal hiked its HRC offer to €530/t in northwest Europe and €490/t in Italy. But there remain concerns over the sustainability of demand throughout the next quarter.

A Brazilian mill is still reviewing bids for its tender seeking 450,000t of mid-volatile coals and 420,000t of low-volatile coals to be shipped in 2021. The mill has asked that bidders extend their offers to the end of this week, market participants said. The same mill also has a tender closing today seeking semi-soft high-volatile, low-fluidity coals and semi-soft high-volatile, high-sulphur coal with up to 2pc sulphur content for shipment next year.

Another Brazilian mill issued a tender on 4 September seeking three 70,000t cargoes of mixed grades — low-volatile, mid-volatile and high-volatile coals — for delivery in December 2020 and March and June 2021. Submissions are due this week. “The steady demand is a good sign for Brazil. Activity is increasing for sure,” a supplier said. A US miner said its contractual deliveries to Brazil have been fairly steady throughout the Covid-19 pandemic so far, while offers from Australian miners are dying down, Brazilian market participants said.

Indian mills have maintained comfortable inventories of coking coal and coke, according to miners, but several US suppliers have recently received enquiries from Indian buyers. “I’m very pleased with the level of interaction with Indian customers recently,” one miner said. Chinese buyers have shown interest in US spot cargoes for loading in October or November, by which time some participants expect that there may be more clarity over import restrictions.

In a recent tender from a Turkish mill for cargoes loading in October and November, at least one miner offered according to the forward curve, while some offered at current index levels. “Pricing is still low, and we’re still walking away from tenders or making offers that we know will be refused”, said a miner.