US mining firms adjusted output in line with the fall in global demand for coking coal in the second quarter, Mines Safety and Health Administration and trade data show, although scant demand continues to weigh on prices.

A survey of over 30 US coking coal mines accounting for the bulk of US production showed a quarterly decline of 31.5pc in the second quarter to 12.78mn short tons (st), and an annual decline of 42.3pc. Trade data show that over the same period, US coking coal exports fell by 22.8pc on a quarterly basis and 39.4pc year on year to 9mn st.

A survey of major low-volatile operations suggests that production for the segment fell by around 20-25pc on a quarterly and annual basis. US-Australia producer Coronado reduced its low-volatile coking coal production at the Buchanan mine by over 50pc on an annual and quarterly basis to 559,005st, while Corsa reduced low-volatile output by 21.9pc on a quarterly basis to 334,377st and Arch reduced production at Beckley Pocahontas by 3.06pc to 279,500st on the quarter. Javelin’s Oak Grove was an exception, more than doubling output on a quarterly basis to 520,956st.

Arch raised its production of high-volatile A coking coal at the Leer and Sentinel mines by 17.4pc from the first quarter to 1.35mn st. But Peabody cut high-volatile A production at Shoal Creek by over two thirds year on year and by 40pc on a quarterly basis to 204,547st.

The rebalancing of supply has slowed the decline in pricing for high-volatile A and low-volatile grades but falling seaborne prices have failed to reinvigorate coking coal demand, which is pinned down by the reduced global steel capacity utilisation. Since the onset of Covid-19, the Argus daily fob Hampton Roads high-volatile A assessment fell to a year-to-date low of $106.50/t. The low-volatile assessment has trended downwards since March and is at its lowest point this year today at $102.50/t, while the high-volatile B assessment fell to a four-year low last week of $89/t.

US coking coal exports have fallen each month since February, and fell by 45pc year on year to 2.58mn st in June, the lowest monthly total since May 2009. Brazil was the largest buyer of US coking coal in the second quarter, but the 1.14mn st shipped to Brazil represented an annual and quarterly decline of more than 45pc. Exports to India fell by 7pc year on year and 14pc from the first quarter to 1.1mn st, and exports to the EU, including the UK, fell by 35.2pc from the first quarter and 49.1pc year on year to 2.42mn st. Turkey provided an outlet to some mining firms in the second quarter, buying 990,243st of US coking coal, twice as much as a year earlier or the previous quarter. Market participants expect the second quarter to be the lowest point of the year for export volumes, and there were signs of recovery in Japan and South Korea. The US shipped only one Panamax cargo to each country in May, but shipped 318,553st to Japan and 239,924st to South Korea in June. The increase is likely to reflect mills reintroducing contracted vessels into their delivery schedule, rather than a return of spot demand.