Coking coal spot price triples to $231/mt FOB Australia on severe shortage

Coking coal prices continued its upward trend Thursday, tripling in value to $231/mt FOB Australia from $76.45/mt at the beginning of the year. This is based on the S&P Global Platts Premium Low Vol benchmark assessment.

Spot prices have climbed $12.50/mt since the beginning of the week on the back of high liquidity.

At least eight trades were reported done or close to being concluded this week. End-user demand, coupled with trader interest fueled the trades.

In terms of a geographical breakdown, the trades were mostly Asia-centric though with some participation from Europe.

Concerns over supply of prime hard coals after two force majeure declarations by Anglo American and South 32 in the last two months, coupled with perennial Chinese coal shortages led to the price rally, sources said.

PLV spot price has now exceeded the Q4 contract price settlement in northeast Asia by $31/mt. The settlement was done at $200/mt FOB Australia last Friday. The soaring met coal prices have also affected steelmakers' production costs, which was previously dominated by the price of iron ore.

Met coal now accounts for 60% of a steel mill's production costs compared with 42% in 2015, according to Platts cost composition model.

Trades in the paper market, however, suggested a backwardated structure.

Paper trades on the Chicago Mercantile Exchange on Platts PLV FOB Australia were at $182/mt FOB Australia Thursday for Q1 2017.

http://www.platts.com/latest-news/metals/singapore/coking-coal-spot-price-triples-to-231mt-fob-australia-27688052?hootpostid=aae61ddc12a41a5b71a41f69deb98e24

A long-running legal dispute, which arose in 2010, came to a head on Thursday whenSouth Africa’s Department of Mineral Resources(DMR) returned the residual 21.4% undivided share of the mining right for the Sishen mine toKumba Iron Ore subsidiary, Sishen Iron Ore Company (SIOC).

The 21.4% share, initially held by steelmaking companyArcelorMittal South Africa (AMSA), has been the subject of a head-scratching dispute, which arose six years ago when the DMR controversially granted the right to politically connected company Imperial Crown Trading (ICT).

Now SIOC has the mining right back, following the completion of an internal appeal process, as prescribed by Section 96 of the Minerals and Petroleum ResourcesDevelopment Act (MPRDA).

Prior to the MPRDA coming into effect, SIOC and AMSA both held undivided shares of a mining right in the properties on which Sishen's mine was located.

In terms of the latest development, SIOC is the sole and exclusive 100% holder of the right to mine iron-ore and quartzite at the Sishen mine.

New Kumba CEO Themba Mkhwanazi expressed appreciation to the DMR for bringing the matter to a successful conclusion.

However, the consent is subject to various conditions.

Kumba said in a release to Creamer Media’s Mining Weekly Online that these include the continuation of the exportparity price agreement between SIOC and AMSA in its role as a strategic South African steel producer, as well as SIOC’s continued support of skills development, research and development and initiatives to enable preferential procurement.

Mkhwanazi made the point that Kumba, an Anglo American subsidiary, remains fully committed to contributing towardsSouth Africa’s developmental objectives against the background of Anglo last year announcing its intention to dispose of its controlling interest in Kumba and to exit the Northern Cape iron-ore business.

http://www.miningweekly.com/article/at-last-residual-mining-right-returned-to-kumba-iron-ores-sishen-2016-10-13

China exported 8.8 million tonnes of steel products in September, falling 21.78% on year and down 2.33% on month, the lowest in the past three months, showed the latest data from the General Administration of Customs (GAC).

Total exports of steel products rose 2.4% on year to 85.12 million tonnes over January-September, data showed.

China's steel makers preferred to sell steel products to domestic buyers than export amid a robust domestic market.  

Meanwhile, China imported 1.13 million tonnes of steel products in September, climbing 11.88% on year and up 1.8% from August; imports over January-September stood at 9.83 million tonnes, gaining 1.03% from the year prior.

China imported 92.99 million tonnes of iron ore in September, 7.98% higher than last year and up 6.01% from August. Over January-September, iron ore imports reached 762.55 million tonnes, rising 9.13% year on year.

http://www.sxcoal.com/news/info?id=4548038&lang=en

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Coal miner New Hope has warned that it will likely start redundancies as its Acland mine, in Queensland, if the state Parliament passes new environmental legislation that risks a A$900-million expansion of the mine.

In a letter to members of the Queensland Parliament, New Hope MD Shane Stephan said that the Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill, in its current form, posed a risk to the expansion of the Acland mine.

The New Acland Stage 3 project will expand the mine’s yearly output from 4.8-million tonnes to 7.5-million tonnes and will extend the mine life beyond the current end-date of 2017/18.

The expanded operation will see a further 260 people employed at the mine, and could inject some A$12-billion in local, state and federal revenues over the life of the project.

However, Stephan noted in his letter that despite the project having been subject to an environmental impact statement (EIS), a public consultation, and the issue of a draft environmental approval by the Department of Environment and Heritage Protection in August last year, the new Bill could stall the expansion by as much as two years, as New Hope would have to apply for an associated water license, which would require a mining lease approval and a baseline assessment.

The baseline assessment could take between 6 to 12 months to complete, Stephan pointed out, noting that the application process for an associated water license could take an additional 6 to 12 months.

“As resource within our current mining lease will be declining in 2018, it has always been New Hope’s case, and in fact the subject of our application for urgency in the current Land Court hearings, that without approval of a further mining lease in a timely manner, by the first quarter of 2017, redundancies would commence as early as April next year,” Stephan said.

Stephan has called on the members of Parliament to support better transitional arrangements within the Bill for projects that were in the latter stages of the approvals process.

In its submissions to the Parliamentary Committee, mining giant Rio Tinto has also warned that the Bill could delay its own Kestrel Extension 4 project and its Hail Creek transition projects, which have already successfully completed various public submissions and third party challenge process as part of their statutory approvals pathways.

The Bill was referred to a Parliamentary Committee in September, with the Agriculture and Environment Committee expected to report back to Parliament by October 25.

The Bill aims strengthen the effectiveness of the environmental assessment of underground water extraction by resource projects, allow the ongoing scrutiny of the environmental impacts of underground water extraction during the operational phase of a resource project, and ensure the administering authority for the Environmental Protection Act was the decision-maker for specific applications relating to environmental authorities.

The Bill further aims to ensure that the impacts of mining projects that are advanced in their environmental and mining tenure approvals are “appropriately assessed” for their impact on the environment and underground water users, and that opportunities for public submissions and third-party appeals are provided before underground water is taken.

http://www.miningweekly.com/article/new-hope-warns-qld-enviro-bill-risks-a900m-coal-mine-expansion-2016-10-13

The China Iron & Steel Association (CISA) hopes prices will remain stable in the fourth quarter, secretary general Liu Zhen Jiang said on the sidelines of Worldsteel-50 in Dubai on October 11.

"We will try to avoid a big drop in steel prices because if we see a new price drop the economic efficiency we see at the moment will be badly impacted," Liu said.

Chinese steel demand is seasonally weaker in the fourth quarter, Liu said, suggesting CISA will remind its members "to pay more attention to balancing supply and demand".

The correlation between iron ore and steel is currently more manageable than before, he said.

"We are happy to see the mills and miners wiser and more rational and we hope this stability and correlation between steel and iron ore remains in the coming months."

The rise of coking coal and coke costs poses a real challenge for mills, but this pressure should support steel prices.

China is on target to reduce capacity by 45 Mtpa this year, and could possibly surpass this.

Next year's reduction target is likely to be no less than this year, Liu said, adding that there will be more mergers like Baosteel and Wuhan Iron and Steel Group going forward in the continuing restructuring of the industry.

"They have reasons to join hands, they have similar product portfolios, the merger will help to optimize the product mix while in the meantime reducing overcapacity," Liu said.

http://www.sxcoal.com/news/info?id=4548010&lang=en

A worker speaks as he loads coal on a truck at a depot near a coal mine from the state-owned Longmay Group on the outskirts of Jixi, in Heilongjiang province, China, October 24, 2015. 

China imported 24.26 million tonnes of coal in September, up more than a third from a year ago, customs data showed on Thursday, as government-enforced mine closures forced utilities and steel mills to buy more foreign raw material.

For the year to date, imports increased 15.2 percent to 180 million tonnes.

The monthly total was up from 17.7 million tonnes last year but down from August's total of more than 26 million tonnes, which was the highest in nearly two years.

The pace of buying may not continue into October after Beijing allowed domestic mines to ramp up output after inventories fell to critically low levels and prices spiked.

http://www.reuters.com/article/us-china-economy-trade-coal-idUSKCN12D07P

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Daily crude steel output of China's key steel mills dropped 3% from ten days ago to 1.72 million tonnes over September 20-30, according to data released by the China Iron and Steel Association (CISA).

Chinese steel makers slowed production amid narrowing profit as steel prices fall and key raw materials prices climbed. The government's efforts to reduce surplus capacity in the sector also contributed to the drop.

Daily crude steel output across the country was estimated at 2.28 million tonnes during the same period, falling 1.89% from ten days ago, the CISA said.

By September 30, stocks of steel products at key steel mills stood at 13.15 million tonnes, down 7.33% from ten days ago, the CISA data showed.

By October 8, total stocks of major steel products in China increased 5.21% on week to 9.95 million tonnes, the tenth consecutive rise on weekly basis.

The daily output of China's key steel mills is expected to further slide in October, as steel makers may tend to make furnace maintenance frequently amid a greater risk of loss coming with rising costs.

http://www.sxcoal.com/news/info?lang=en&id=4548008

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China's iron ore imports surged to the second highest on record in September, customs data showed on Thursday, as mills in the world's top steel producer ramped up production amid healthy profits.

Firm domestic prices also helped curb China's steel exports to the lowest since February, offering a reprieve for overseas rivals that had been angered by a flood of cheap Chinese products.

"Despite a modest fall in steel prices, steel mills were still making a profit in September and thus lifted steel production," said Xia Junyan, investment manager at Hangzhou CIEC Trading Co in Shanghai.

"Actually this year's steel production stood at very high levels, boosting appetite for imported iron ore."

China imported 92.99 million tonnes of iron ore in September, up 6.0 percent from the previous month, data from the General Administration of Customs showed. That was the highest since the all-time high of 96.27 million tonnes in December 2015.

Imports of the steelmaking raw material for January to September reached 763 million tonnes, up 9.1 percent from a year ago.

The country's steel exports fell 2.3 percent from August to 8.80 million tonnes last month, the data showed. Shipments for the first nine months of the year were up 2.4 percent at 85.12 million tonnes.

Chinese prices for rebar steel, a construction product, fell 6.5 percent in September, but are still up 39 percent since the beginning of this year.

However, prices may came under under pressure from Beijing's efforts to restrict home purchases to cool its property market.

http://www.reuters.com/article/china-economy-trade-ironore-idUSL4N1CJ1BR

The attributable ferrochrome production ofMerafe is on the rise, with the black-controlled JSE-listed company reporting upped output primarily on additional production from the low-energy Project Lion II furnaces of theGlencore Merafe Chrome Venture.

South Africa’s 300 000-member Bafokeng community has the influential shareholding in Merafe, participating in the venture as a pooling and sharing partner.

The company said on Wednesday that furnace refurbishments had been timed to optimise stock levels and manage production volumes, which rose 8 000 t to 285 000 t from January to September, 3% higher than for the same period last year, and 8.5% up in the third quarter to 89 000 t.

Headed by CEO Zanele Matlala, Merafe reported earlier this year that it expects to benefit from renewed positive ferrochrome demand trends, as well as from only four of seven South African ferrochrome producers currently being in production.

The fourth-quarter European benchmark ferrochrome price has been settled at a 12.2%-higher 110c a pound, well up on the 98c-a-pound price of the third quarter.

Ferrochrome-using global stainless steel production is expected to rise by 2.6% this year and by 3.1% next year.

Merafe’s main focus is on its 20.5% participation in the earnings before taxes, depreciation and amortisation of theGlencore Merafe Chrome Venture, in which the London-, Hong Kong- and Johannesburg-listed Glencore holds 79.5%.

As reported earlier by Creamer Media’s Mining Weekly Online, the Lion ferrochrome smelter, owned and operated by the venture, uses 37% less electricity than conventional ferrochrome processes to produce the equivalent volume of ferrochrome.

In addition, the smelter needs far less coke than conventional smelters and uses significant amounts of locally produced, lower-cost anthracite and char.

Had the Lion operation not installed the Premus technology, it would have needed an additional 1 776 MWh to produce the same volume of ferrochrome.

Instead, all four furnaces collectively use some 4 800 MWh/d.

The efficient use of energy – enhanced by pelletising to cope with increasing volumes of fine chrome ore, the proximity of the Port of Maputo, the use of more cost-effective uppergroup two (UG2) chromite ore recovered from platinumtailings – places Lion in a favourable cost position.

The UG2 ore is sourced from the nearby Mototolo mine, aplatinum joint venture between Glencore, black economic-empowerment partner Kagiso Tiso and Anglo AmericanPlatinum.

The bulk of the smelter’s ore arrives by road from theGlencore Merafe Chrome Venture’s Thorncliffe and Magareng mines, which are some 25 km away, and the final ferrochrome product leaves by road in an area not served byrail.

The pelletised material is put through prereduction kilns, which radically reduce furnace time and, thus, electricityconsumption.

Lion II, which was commissioned more than two years ago, doubled the 360 000 t capacity of Lion I to give the Lion smelter a combined capacity of 720 000 t/y of ferrochrome.

Lion II was built at a capital cost of R4.9-billion and includes the Magareng mine.

http://www.miningweekly.com/article/merafe-ferrochrome-output-rising-into-higher-price-environment-2016-10-12

Northwestern China's Xinjiang Uygur autonomous region produced 100.87 million tonnes of raw coal in the first eight months, coming up to the fifth biggest coal producer after Inner Mongolia, Shanxi, Shaanxi and Guizhou, according to the Xinjing government website.

The autonomous region has seen its coal industry moving ahead in recent years, with an array of modern coal mines established and put into operation, greatly boosting coal-based power generation and chemical projects.

In 2015, raw coal output of Xinjiang stood at 140 million tonnes, ranking sixth across the country.

http://www.sxcoal.com/news/info?id=4547970&lang=en

Coal stocks at key power plants across the country surged to 60 million tonnes by October 10 this year, compared with 51.22 million tonnes a month ago, as supply continued to exceed consumption at utilities, official data showed.

That could help sustain power plants to run for 17-18 days on average, up from 14 days at the end of August, when their coal stocks dropped to 51.22 million tonnes.

Key utilities have been seeing their coal stocks rising in the past month, reaching 53.1 million tonnes on September 20 and further to 56.06 million tonnes on September 30.

That was mainly attributed to the drop in power demand for air-conditioning purpose as the hot summer ended, in addition to continuous restocking efforts by utilities.

Analyst predicted that coal stocks at China's key power plants will continue to rise in the remaining days of the year, hovering above 60 million tonnes.

Meanwhile, coal stocks at power plants under the six coastal utilities stood at 13.25 million tonnes on October 10, up 8.5% from the end of September. That could last 23.7 days of consumption, as daily coal burns dropped 5.9% from late September to 0.56 million tonnes.

Coal supply from main production areas are expected to increase, as the government allowed more mines to operate within 276-330 days to ensure supply for the winter heating season, following extreme tightness in recent summer months that lifted up the fossil fuel from multi-year lows.  

Prices of thermal coal, used mainly for power generation, have climbed 63.9% from the start of the year, with 5,500 Kcal/kg NAR material traded at benchmark Qinhuangdao port hitting 599 yuan/t on October 11, up 70.7% from the lowest recorded in November last year.

http://www.sxcoal.com/news/info?lang=en&id=4547976

Iran's plan to increase steel capacity could leave 20 million mt/year available for export, Bahram Sobhani, managing director of Mobarakeh Steel, said Tuesday at Worldsteel-50 in Dubai.

The government is planning to increase production to 55 million mt/year by 2025, with 35 million-36 million mt likely to be consumed domestically, he said. Iranian exports are currently around 6 million mt.

Not all delegates were happy to hear this, however.

The strategy was "very questionable" with Iran following a similar trajectory to China -- "increasing capacity without really knowing where to go with it ... Potentially Iran will be a problem going forward," Axel Eggert of European steel producers' association Eurofer told S&P Global Platts on the sidelines of the conference.

Sobhani played down the increased export availability.

"If capacity increases to 55 million mt, it does not mean production will be at that level, it could be another five years until we reach this," he said.

Countries bordering Iran in the south and east had no steel production and good markets, and the eventual resolution of conflicts in the Middle East would mean the export capacity was necessary, Sobhani added.

He said economic growth moved up from minus 2% a few years ago to 6% last year, amid stronger demand for steel.

There has been a huge investment in the country's car industry, and lifestyle changes mean people are buying more household appliances. At the same time, infrastructure is developing quickly and residential housing construction is also increasing.

All this suggests higher steel demand going forward, while pent-up demand in the oil and gas industry after sanctions were lifted could also buoy steel buying.

Mobarakeh recently installed a billet caster at its plant, and has been exporting steel.

http://www.platts.com/latest-news/metals/dubai/iranian-steel-exports-to-reach-20-million-mt-26567046

Glencore said on October 11 that it would resume operation at its Collinsville coal mine in Australia's Queensland state by hiring over 200 workers after scaling back production earlier this year, as coal demand resurged in Asia, Reuters reported.

Glencore did not specify when production is expected to resume, while it would likely be in the next couple of months or beginning of next year.

The decision was made after seeing increased demand from Southeast Asia for the specific type of coal produced by Collinsville, the company said.

The coal mine has a production capacity of 6 million tonnes per annum, and mainly produces thermal and coking coal.

There was very little active mining from the mine throughout 2016 with most of the activities focused on drawing down stockpiles which had built up significantly when demand for coal waned, the report cited the company as said.

Less than a year after the coal industry was declared to be in terminal decline as governments tackle reducing carbon dioxide emissions, markets for coal used to generate power and make steel have surged on factors such as China tightening regulations on local production.

Thermal coal prices at the Australian port of Newcastle are up 69% this year to $84.2/t, the highest since January 2014.

Prices for metallurgical coal, used in steel making and also mined at the Collinsville mine, have more than doubled since January to around $200/t.

The 230-strong workforce had been cut by 180, 140 of whom were redeployed to other Glencore mines.

Glencore's saleable coal production in fiscal 2014-15 (July-June) was at 2.6 million tonnes and at 971,000 tonnes in fiscal 2015-16.

Production at Collinsville is not expected to increase Glencore's overall coal exports from Australia given the recent close of its underground mines at Newlands and West Wallsend, the company said.

Exporting coal via the Abbot Point Coal Terminal, Collinsville mine is managed by Glencore and is owned by a joint venture partnership between Glencore (55%), Itochu Coal Resources (35%) and Sumitomo (10%).

Glencore is one of Australia's largest coal producers running 18 mines and employing some 7,650 workers.

http://www.sxcoal.com/news/info?id=4547951&lang=en

The rise in the price of coking coal shows no signs of running out of steam with the Australian export benchmark price climbing again as Chinese traders return from a weeklong holiday with renewed confidence in the the health of the world's second largest economy.

Metallurgical coal was exchanging hands at $218.10 on Tuesday, up $4.70 since the start of the week according to data provided by Steel Index. Steelmaking coal prices are up nearly three-fold since hitting multi-year lows in November last year.

Coal used in power generation has also experienced an unexpected jump this year with seaborne prices for thermal coal up more than two-thirds since the start of the year to exchange hands for just over $84 a tonne on Monday, up 8% since the start of October.

The rally was triggered by Beijing’s decision to limit coal mines' operating days to 276 or fewer a year from 330 before as it seeks to restructure the industry. Safety closures and weather related supply curbs in China and Australia only added fuel to the fire.

Iron ore also enjoyed renewed interest adding nearly 4% this week to trade at $56.50 a tonne on Tuesday.  The price of iron ore is up 32% this year and like coking coal the resurgence comes against expectations of further declines as Chinese steelmaking peak after three decades of growth.

In 2011 floods in key export region in Queensland saw the coking coal price touch  $335 a tonne. The iron ore price peaked in February that same year at $191.50 a tonne. Despite iron ore rally, the iron ore/coking coal ratio is now at its lowest level this century after peaking at 1.2x during 2010.

http://www.mining.com/coking-coal-iron-ore-prices-resume-surge/?utm_source=twitterfeed&utm_medium=twitter

Shanxi Coking Coal Group, China's top producer of the steelmaking material, decided to raise washed coking coal prices transported by railways by 50-95 yuan/t ($7.45/t-$14.15/t), effective October 11, sources said.

The state-owned miner raised washed primiary coking coal prices  by 80-90 yuan/t, and wahsed fat coal by 80-95 yuan/t. It also adjusted up its washed 1/3 coking coal by 80 yuan/t, PCI coal and other coking coal  varieties by 50 yuan/t.

In late-September, Shanxi Coking Coal raised October prices of washed coking coal shipped via northern ports by 100-170 yuan/t.

It was learned that Lu'an Group Sima coal mine also lifted up price of #2 washed coking coal by 90 yuan/t to 915 yuan/t, effective October 11.

Northeastern China's Heilongjiang Longmay Group also raised coking coal prices by 130 yuan/ton October 11, setting primary coking coal at 995 yuan/t, 1/3 coking coal at 910 yuan/t, and gas coal at 865 yuan/t.

Coking coal supply still fell short of demand from coke and steel producers after the weeklong National Day holidays despite the government's easing of production control, mainly affected by the newly-implemented truck transport rules and production halts during the holidays.

http://www.sxcoal.com/news/info?id=4547934&lang=en

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Daqin line, China's leading coal-dedicated rail line connecting Datong City of coal-rich Shanxi province with northern Qinhuangdao port, transported 29.71 million tonnes of coal in September, further increasing by 2.2% after rising for two consecutive months but down 4.81% on the year, said a statement released by Daqin Railway Co., Ltd on October 11.

The operation of Zhunchi (Zhunger-Shenchi) railway boosted coal transport of Shuohuang (Shuozhou, Shanxi-Huanghua port, Hebei) railway this year, which squeezed the transport by Daqin line.

While in September, Daqin's daily coal transport averaged 0.99 million tonnes, up 5.32% on month, thanks to the new truck transport rules and increased transport ahead of its routine autumn maintenance.

Daqin rail line realized coal transport of 241.73 million tonnes in the first nine months, falling 20.75% year on year.

The coal-dedicated rail line started its autumn maintenance from October 8, lasting 3-4 hours each morning for some 20 days, during which coal deliveries to Qinhuangdao, SDIC Caofeidian and SDIC Jingtang ports, which mainly get coal via Daqin rail line, are expected to drop.

As of October 8, stockpiles at four Daqin-backed coal ports stood at 7.72 million tonnes, rising 49% from the beginning of September.

http://www.sxcoal.com/news/info?lang=en&id=4547927

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Global steel demand will rise by a meagre 0.2 percent this year, according to the World Steel Association (WSA).

Next year won't be much better with a forecast of just 0.5 percent growth.

But it could have been worse. The WSA has upped its forecasts from April, when it was expecting demand to fall by 0.8 percent this year.

The improvement is all about China, where production and demand have been lifted by the government's latest stimulus package, another push of the infrastructure and construction buttons.

Within the steel universe, however, one sector is faring much better.

Stainless steel production rebounded strongly in the first half of this year, thanks again to China.

And that has implications for two of the metallic inputs into the stainless production process, nickel and ferro-chrome.

The latter is one of those metals that trades largely in the shadows for want of exchange-traded pricing.

But that may be about to change with the London Metal Exchange (LME) eyeing a potential new contract.

STAINLESS SURGE

Global stainless production rose by 4.1 percent to 22.1 million tonnes in the first half of this year, according to the International Stainless Steel Forum (ISSF).

That represents both a strong recovery from last year, when production fell by 0.3 percent, and an outperformance relative to total steel production, which fell by almost two percent over the same period.

And, unsurprisingly, this is again all about China, which produces over half the world's stainless steel.

Chinese production surged by 11.5 percent in the second quarter, boosting first-half growth to 7.9 percent.

Domestic demand has been booming but so too have exports, a mini drama within the broader story of rising pushback against the flood of Chinese steel exports.

The trade tensions are there to see in the ISSF's regional breakdown. Other than China the only other region to experience stainless production growth was the rest of Asia.

Output in the rest of the world declined, a trend that may start reversing as the trade sanctions accumulate.

THE NICKEL EFFECT

Stainless steel is a core driver of demand for nickel, a market which is currently fixated on the shifting supply dynamics arising from government policy in Indonesia and the Philippines.

Indonesia was the major supplier of nickel ore for China's production of nickel pig iron, a form of the metal used for stainless production.

The country banned ore exports in 2014 in a drive to force its miners down the value chain. The policy has been only partly successful. There has been some build-out of smelter capacity, and in the case of China's Tsingshan, even stainless capacity.

But other smelter projects have struggled to get off the ground and the government is now mulling whether to relax the ban for those that have started construction work.

The Philippines filled the ore supply gap after the Indonesian ban but the country's nickel production has been thrown into disarray by a draconian environmental review of its miners.

A quarter of the country's miners have been closed with another 20 of them under the threat of suspension, many of them nickel operations.

Which begs the question of how China's stainless steel producers are getting sufficient nickel to feed such strong output.

The answer, according to analysts at Macquarie Bank, is by blending higher-content concentrates and even refined metal into their ore mix. ("Nickel and the Philippines - the big surprise of 2016", July 13, 2016).

There is, after all, no shortage of refined nickel around, particularly in China, which has lifted imports by 68 percent to 290,000 tonnes so far this year.

This relatively new usage of primary metal in the stainless production process may be one reason why Chinese nickel demand is up eight percent so far this year and global usage six percent, according to the International Nickel Study Group.

THE FERRO-CHROME EFFECT

Stainless steel producers also need ferro-chrome and China's surging output has already translated into strong price rises, again according to Macquarie Bank. ("Chrome swings back to a raw material constraint", Oct. 5, 2016).

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This market is still characterised by producer benchmark pricing.

South Africa's Merafe Resources settled European deliveries for the fourth quarter at 110 cents per lb, the highest level in two years and a 12-cent increase in a quarter normally characterised by price weakness.

That reflects a shortage of chrome ore further upstream, particularly falling production in South Africa, the world's largest supplier.

China has no chrome resource of its own and is highly dependent on South African supply. Port stocks, according to Macquarie, are at multi-year lows thanks to booming demand from stainless makers.

The bank does expect some pick-up in supply but "overall, we are looking at a chrome market where inventories will continue falling over the coming years".

With Indonesian stainless capacity rising, thanks in large part to that government policy on pushing for value-add in the nickel sector, "the coming years may well see an ongoing scramble for supply."

NEW CONTRACT?

None of which would normally make many headlines outside of the small world that is the chrome market.

But ferro-chrome has made it onto the radar of the London Metal Exchange (LME).

A group of industry participants recently met in London to discuss the idea of a new contract, according to Metal Bulletin.

The idea of a London ferro-chrome contract has done the rounds before but this time seems to be gaining traction to the point that the exchange is happy to confirm the interest.

"The LME has been approached by industry users regarding the introduction of an LME ferro-chrome contract," it said.

"We believe in developing products in conjunction with participants to meet the real needs of the market, and are committed to assessing and enhancing our offering as effectively as possible."

So watch this space.

The current stainless steel surge may be about to have a bigger impact than just boosting demand for nickel and ferro-chrome.

http://www.reuters.com/article/stainless-steel-ahome-idUSL8N1CH32L

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A dramatic surge in the spot price of Australia's second-biggest
export, coking coal, has seen Japanese steel mills delay new contract
settlements that would deliver big gains to Australian miners, in a
standoff over an expected doubling of the contract price that could
spell the end of the current pricing system, The Australian reported.

Australian coking coal spot prices have surged 155% since the start of
June to a four-year high of $213/t as China cracked down on mining
overcapacity at the same time that government stimulus fired the
housing market, while rain and derailments hit Australian supply.

The price is now more than double the still-standing September quarter
contract price of $92.50/t, with the size of the ¬potential jump in
the new ¬contract price delaying settlement more than a week into the
December quarter.

While BHP Billiton, the world's biggest coking coal shipper, has moved
almost completely to spot pricing and is reaping the benefits of the
surge, other ¬Australian miners are still receiving a contract price
less than half that of current spot prices as they wait for price
settlement.

Japanese steel mills are delaying settling the current quarter's
price, which is normally set at close to the spot price at the start
of the quarter, as they hold out for a hoped-for fall in spot -prices.

The surge in coking coal prices looks like being the major driver in a
wiping out of Australia's monthly trade deficits for the first time in
more than two years.

Price negotiations between Japanese steel mills and Australian miners
continued on October 7 in Sydney at the 33rd Japan-Australia Coal
Conference, a closed meeting of coalminers and users that occurs every
two years.

Whitehaven Coal managing director Paul Flynn, who was this JACC
meeting's co-chairman, said it was too early to say where contract
prices would settle.

Whitehaven, which produces both coking coal used in steelmaking and
the thermal coal burned by power stations, is ¬exposed to the
quarterly coking price settlements but is not participating in the
negotiations.

According to Macquarie commodities analysts, Nippon Steel is demanding
December quarter contract prices of $160/t.

But miner Anglo American wants $212/t, which would be in line with the
regular practice of settling at spot prices at the start of the
quarter.

The price of Australian PCI coal, a lower-grade steelmaking ingredient
whose spot prices have not risen as much as premium coking coal,
settled last week at $133/t, in line with the spot price.

http://www.sxcoal.com/news/info?id=4547901&lang=en

Peabody deal at $200/mt said to break Q4 coking coal impasse

A benchmark coking coal accord at the upper end of expectations
appears to be getting established, as Peabody Energy has sold North
Goonyella premium mid-vol at $200/mt FOB Australia under contract for
the fourth quarter to Nippon Steel, according to a source close to the
matter.

The source described the sale as a benchmark deal, but this could not
immediately be confirmed.

The Q3 benchmark was $92.50/mt FOB, and spot prices rose after key
spot buyer China increased purchases, supply was disrupted in
Australia and China, and mining curbs were imposed in China, along
with limited exports from the US at a time of greater global spot
trade exposure. Steelmakers were left stunned at the prospect of
$200/mt benchmark, given tight availability of alternative coals, with
one Atlantic buyer suggesting the likely outcome would be lower steel
production in due course. European and Brazilian steel mills have
bought some coals ahead to cover the year at potentially lower prices,
reducing the exposure to the quarterly benchmark while also increasing
spot and index-linked purchasing.

Talk of the settlement by US miner Peabody, which has US operations
under Chapter 11 and mines met coal in Australia, surfaced Monday from
the US, a public holiday in Japan. St Louis-based Peabody declined to
comment on the matter. Nippon Steel & Sumitomo Metal Corp. was not
available for comment when contacted outside usual office hours.

The two-day Australia Japan Coal Conference ended Friday afternoon,
with no news of a settlement emerging that day. The AJCC draws senior
steel and coal executives, promoting cordial discussion around
longer-term planning and industry challenges, more so than finalizing
price negotiations.

Analyst Lucas Pipes of investment bank FBR, citing a report of a
"potential settlement," described it as "well above our and others'
expectations even over the weekend of around $180-$190/mt."

Anglo American and Glencore have previously set the hard coking coal
benchmark in their sales negotiations with Asian steelmakers, leading
some buyers to question the validity of the Peabody arrangement, ahead
of confirmation.

A source close to the price talks said Nippon Steel was getting closer
to meeting bids after an opening negotiation position last month said
to have been $150/mt FOB.

"At the AJCC, Nippon became a lot more sensible about pricing, edging
closer to a deal. If someone moved down to $190 they would have got a
deal."

As key miners were seeking to get higher prices in line with spot
prices, and keeping up offers last heard at $212/mt FOB in light of
Chinese buying interest and a force majeure declared at Anglo's German
Creek mine, Peabody may have taken the initiative. Peabody already
settled PCI for Q4 at $133/mt FOB with a separate mill.

The usual 80% ratio for PCI to HCC would have yielded a HCC price of
around $160/mt, suggested a buyer, who was surprised at a $200/mt
level potentially agreed. A $200/mt outcome for HCC would lead PCI to
a 66.5% ratio, compared to the current spot price ratio at 61%.

The news came after the price settlement was delayed into a second
week, after the usual calendar deadline of the end of the prior
quarter in question.

"A settlement of $200/mt would be the highest in US dollars since the
Q3 2012 contract of $225/mt," FBR said. "In AUD, the settlement would
imply a price of A$263/mt, the highest since Q4 2011 when the contract
settled at A$274/mt and the Australian dollar was trading at $1.04/mt
vs. $0.76 today."

North Goonyella had a longwall move expected to last till
end-September. It is a mid-vol with high fluidity. On the globalCOAL
brokered screen trading platform, North Goonyella makes up one of five
brands traded on the premium mid-vol contract, along with BHP Billiton
Mitsubishi Alliance's Goonyella, Glencore's Oaky Creek, South32's
Illawarra, and Anglo American's Moranbah North.

http://www.platts.com/latest-news/metals/london/peabody-deal-at-200mt-said-to-break-q4-coking-21741895

China Baowu Steel Group, restructured from Wuhan Iron and Steel Group (WISCO) and Baoshan Iron and Steel Group (Baosteel), planned to complete the reduction target of 6.05 million tonnes per annum (Mtpa) of steelmaking capacity set for 2016-2017 by the end of this year, sources reported.

WISCO will shut 1.4 Mtpa of steel capacity over the period, while Baosteel will cut 4.65 Mtpa, said sources.

The move may usher in a new wave of capacity cuts in China's steel industry, contributing to reorganization and improvement of the sector, said analysts.

The merger of China's two major steelmakers had been approved by the State Council, the State-owned Assets Supervision and Administration Commission said on September 22.

Shanghai-based Baosteel Group, China's second largest steelmaker, will issue new stock to shareholders of Wuhan Iron and Steel Group to absorb the other company, according to the merger plan announced late September 20.

http://www.sxcoal.com/news/info?id=4547915&lang=en

Mining giant Rio Tinto said on Monday that the International Finance Corporation (IFC), a partner in its $20 billion Simandou iron ore project in Guinea, is selling its 4.6 percent stake.

The exit of IFC, an arm of the World Bank, is the latest setback for the project to develop the world's biggest untapped iron ore reserves. In July, Rio Tinto's new Chief Executive Jean-Sebastien Jacques indicated the project had been shelved temporarily due to a sustained slump in prices.

"We confirm that the IFC has exercised a put option, which it has held since 2006, to require Rio Tinto and Chinalco to buy their stake in Simfer," Rio Tinto said in an emailed statement, referring to the joint venture.

Rio has a 46.6 percent stake in the project; China's Chinalco has 41.3 percent and the Guinea government has 7.5 percent.

A senior official at Guinea's mines ministry said he was not aware of the decision.

The West African country is counting on the project to spur economic growth after Guinea was hit by a crippling Ebola epidemic that officially ended in June.

When fully operational, Simandou has the potential to double Guinea’s GDP, the project partners have said, while China, the world's largest iron ore consumer provides an obvious market.

http://www.reuters.com/article/us-guinea-mining-simandou-idUSKCN12A276

 
As many as 173 Chinese steel enterprises were found to have violated the country's environmental rules during recent nationwide investigations into the industry, the environment ministry said on Monday.

The Ministry of Environmental Protection said in July that it had set up dedicated inspection teams to determine whether the country's giant steel sector was meeting state technology and emission standards.

After visiting a total of 1,019 steel enterprises across the country, the inspectors found that 173 firms had broken the rules, with 62 firms involved in illegal construction and 35 exceeding state emission limits, according to the ministry's official publication, China Environmental News.

Worried by the social and political impact of pollution, China has vowed to crack down on lawbreaking companies and the local governments that protect them. It has also promised to use tougher environmental standards to help shut as much as 100-150 million tonnes of surplus steel capacity over the next five years.

The ministry said 23 of the offending firms had been asked to cut production, while another 29 had been shut down temporarily in order to "rectify" their problems. Fines totaling 18.9 million yuan ($2.8 million) have been imposed and three officials have been detained.

The paper singled out Xinyi Huada Steel in eastern China's Jiangsu province, saying the local government had repeatedly ignored requests from environmental regulators to close the firm down for producing illegally.

As part of its war on pollution, China's traditionally underpowered environment ministry was this year granted new powers to send inspection teams to local regions without prior warning, and was also given the authority to summon senior provincial officials to explain their conduct.

During a tour of Hebei province, China's biggest steel producing region as well as its biggest polluter, inspectors found that local steel firms had illegally expanded capacity and engaged in "fraudulent practices".

The ministry has called on the regions to continue to pay special attention to the steel sector, to crack down hard on illegal behavior and to cooperate with local government efforts to close down surplus capacity in the industry, China Environmental News said.

http://www.chinamining.org/News/2016-10-10/1476087009d77551.html

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Dongbei Special Steel Group Co Ltd has formally entered into a bankruptcy restructuring process following a court filing by one of its creditors, official news agency Xinhua reported on Monday.

Dongbei, owned by the Liaoning provincial government in the country's "rustbelt" northeast, has been at the heart of troubles in China's debt market this year, defaulting on nine separate bonds even as Beijing has vowed to crack down on "zombie" firms with perennial losses and too much debt.

Its first bond default in late March helped trigger a sharp sell-off in the corporate debt markets as investors reassessed the likelihood of bailouts for key provincially-owned state enterprises, especially in coal and steel sectors hobbled by overcapacity.

The firm has also been involved in an extended struggle with creditors over how to restructure its debt, highlighting the challenges in restructuring inefficient, state-owned enterprises, according to Reuters IFR and other media publications.

Dongbei's listed subsidiary Fushun Special Steel had previously said on Sept. 30 that a Chinese court was reviewing an application for such a bankruptcy restructuring.

In a separate exchange filing on Monday, Fushun said that 496.9 million of its shares held by Dongbei had been frozen by the court.

The filing by creditor Alashan Jinzhen Smelting Co Ltd includes Dongbei subsidiaries Dalian Special Steel Co Ltd and Dalian Gaohe Jinbang Xiancun Co Ltd, Xinhua said. In its exchange filing, Fushun said it had not been named in the filing.

A court-managed bankruptcy process will not necessarily end in liquidation, but analysts said the recent court-ordered liquidation of Guangxi Nonferrous Metal Group, another provincially-owned enterprise, sets a worrying precedent.

http://www.reuters.com/article/us-china-debt-dongbei-idUSKCN12A0VQ

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Indonesia's Ministry of Energy and Mineral Resources has set its October thermal coal reference price, also known as Harga Batubara Acuan or HBA, at $69.07/mt FOB, up 8% from September and the highest level in two years. October HBA also represents a 20% jump from a year ago. The HBA was last set higher at $69.69/mt in September 2014.

The HBA price rally since May this year has been largely driven by a mix of supply cuts and strong demand from China.

The HBA is a monthly average price based 25% on the Platts Kalimantan 5,900 kcal/kg GAR assessment; 25% on the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR); 25% on the Newcastle Export Index -- formerly the Barlow-Jonker index (6,322 kcal/kg GAR) of Energy Publishing -- and 25% on the globalCOAL Newcastle (6,000 kcal/kg NAR) index.

In September, the daily Platts FOB Kalimantan 5,900 kcal/kg GAR coal assessment averaged $62.14/mt, up from $57.19/mt in August, while the daily 90-day Platts Newcastle FOB price for coal with a calorific value of 6,300 kcal/kg GAR averaged $72.90/mt, up from $67.37/mt in the previous month.

The HBA price for thermal coal is the basis for determining the prices of 75 Indonesian coal products and for calculating the royalties producers have to pay for each metric ton of coal they sell locally or overseas.

It is based on 6,322 kcal/kg GAR coal, with 8% total moisture content, 15% ash as received and 0.8% sulfur as received.

http://www.platts.com/latest-news/coal/singapore/indonesias-october-hba-thermal-coal-price-hits-27683224

Northern China's coal-rich Inner Mongolia autonomous region has given green light to 172 coal mines with capacity totaling 534.32 Mtpa to operate within 276-330 days, in response to the central government's call to ensure supply during this winter, the regional Economic and Information Commission said on October 9.

These coal mines will help provide additional coal supply as much as 8.48 million tonnes each month over October-December, roughly 280,000 tonnes each day.

As one major coal producer in China, Inner Mongolia produced 541.39 million tonnes of coal in the first eight months, down 10.1% year on year, accounting for 24.8% of the country's total. Coal output in August stood at 67.78 million tonnes, down 8.3% on year but up1.9% on month.

China has been suffering coal shortages in recent months, mainly due to the government-mandated 276-workday at coal mines, as demand from utilities jumped amid strong air-conditioning demand in summer months.

This helped to spur prices of thermal coal, used primarily for power generation, to surge to 32-month high as of the end of September. Domestic 5,500 Kcal/kg NAR coal jumped to 579 yuan/t on September 30, up 13.8% from the previous month and 58.4% higher than the start of the year, showed the Fenwei CCI Thermal index.

In a statement released on September 29, the National Development and Reform Commission (NDRC) said more coal mines would be allowed to boost production within 276-330 operating days to ensure supply for winter heating and power generation.

Besides those identified by China National Coal Association as advanced capacity, coal mines listed as Level I safety mines in 2015 by the State Administration of Coal Mine Safety and those safe and high-efficiency mines recommended by local governments would be allowed to increase output, said official with the NDRC.

Moreover, due to such restrictions as coal varieties and distance to end users, some coal-producing provinces could select some mines meeting Level II safety standards in 2015 and include them into the category of accommodation, sources said.

Newly-built coal mines that would replace outdated ones would also be allowed to commence operation before the old ones are closed, which could be allowed to shut later than previously required, the NDRC said.

http://www.sxcoal.com/news/info?id=4547878&lang=en

UK-based miner Anglo American declared force majeure on October 7 for fourth-quarter shipments of German Creek met coal to a few long-term contract customers, effective October 3, Platts reported, citing sources.

It was because of "a significant weighting event on the longwall roof support which impacted the working height of the longwall and created multiple cavities," the report cited one Asian steel mill source as said.

Anglo American had been plagued with issues including industrial action earlier, due to workers' employment terms and hazardous working environment at the German Creek-Grasstree operation.

The force majeure declaration comes amid ongoing negotiations for fourth-quarter term contracts with Northeast Asian end-users. The talks have been challenging this quarter with prices of Premium Low Vol HCC spiking since July, and with Anglo American in the middle of divesting its coal business.

The force majeure declaration affects only the German Creek hard coking coal brand mined from the German Creek-Grasstree underground mine operation in Australia's Queensland state for the fourth-quarter laycan, the report said. Yet there were no details on the volume affected.

Meanwhile, it will probably squeeze near-term supply for Premium Low Vol HCC – creating increased demand for spot November and December laycan cargoes, it cited sources as saying.

The German Creek-Grasstree mine produced 6.28 million tonnest of saleable products in fiscal 2014-15, according to the Department of Natural Resources and Mines.

This means that an estimated 1.5 million-1.6 million tonnes of coal could be disrupted, if all Q4 deliveries will be affected by the force majeure.

Anglo American's force majeure notification also comes on the heels of production outages at other Australian mining operations earlier this year. A force majeure was declared in early September at South32's Appin mine at its Illawarra project due to roofing problems.

http://www.sxcoal.com/news/info?id=4547824&lang=en

The Purchasing Managers Index (PMI) for China's steel industry slid to 49.5 in September, compared with 50.1 in the previous month, showed data from the China Federation of Logistics and Purchasing (CFLP).

After two consecutive months' fall, the index dropped below the 50-point mark that separates growth from contraction in normally peak season, because of high operating rate and more stocks vis-a-vis few orders and increased cost in domestic steel industry.

In September, the steel industry output sub-index was 50.2, sliding 0.3 from 50.5 in August, but still above the 50-point mark for the third month.

Steel producers boosted output during July to August, encouraged by considerable profit, which shrank recently affected by sliding steel prices and increased production cost.

China's daily steel output is expected to fall back in October, with more furnaces under maintenance and the implementation of new truck overloading policy.

In September, the new orders sub-index plunged to 49.2, compared with 52.1 in the previous month, as current sluggish demand failed to reach expectations.

The purchase price index fell back from 61.4 in August to 56.6 in the month, above the 50-point mark for the seventh straight month.

Entering September, steel demand from end users climbed as construction fastened in the normally peak season. Steel prices, however, dived this year.

As of September 28, the ex-plant price of steel billets in Tangshan was at 2100 yuan/t with VAT, down 230 yuan/t from the previous month.

http://www.sxcoal.com/news/info?lang=en&id=4547820

Fortescue Metals Group has bought out joint venture partner BC Iron of its 75 per cent stake in the Nullagine iron ore project for the princely sum of $1.

BC Iron said it would eliminate the care and maintenance costs of the mothballed project and relieve it of its tenement commitments.

In return, FMG will pay an ongoing royalty on all future iron ore mined from Nullagine if and when production recommences.

However the future royalty payments would be partly waived to offset the obligations assumed by FMG as part of deal.

The Nullagine mine was in production for five years before weak iron ore prices forced it to be shuttered in December last year.

BC said it had sought interest in its 75 per cent stake in Nullagine from interested third parties.

Operations at the Nullagine iron ore project before it was shuttered late last year.

“Despite the identification of further operating cost savings and an improvement in iron ore prices, the Nullagine mine has remained marginal from BC Iron’s perspective and, based on projected future iron ore prices, it is unlikely that a restart of operations will become viable in the medium term under the current joint venture structure,” the company said in a statement.

“Ultimately, a sale has been agreed with Fortescue, and BC Iron’s view is that this is the appropriate transaction to maximise value for the company’s interest in Nullagine.”

Under the terms of the deal, BC Iron will retain its $US1.5 million debt obligation to Henghou Industries and an obligation to pay $5.2 million in deferred State Government royalties.

Under the royalty agreement, Fortescue will pay BC Iron a royalty on 75 per cent of the future iron ore that is mined from the Nullagine tenements.

Specifically, the royalty is 1-2 per cent of free-on-board revenue received by Fortescue for direct shipping ore and 50 cents-$1.50 per tonne for low grade ore adjusted for 15 per cent yield loss.

There will be a 50 per cent reduction in the royalty rate for all iron ore mined above 15 million tonnes and a 75 per cent reduction for all iron ore mined above 25 million tonnes.

Fortescue will initially pay BC Iron 33 per cent of the agreed royalty in cash, until the total amount waived by BC Iron equals $7.5 million.

After that, Fortescue will pay BC 100 per cent of the agreed royalty.

The amount to be waived by BC Iron is intended to offset the obligations Fortescue assumes as part of the transaction, including rehabilitation liabilities.

BC chairman Tony Kiernan said Nullagine had been a successful operation and BC Iron shareholders had extracted significant value from it over a number of years.

BC managing director Alwyn Vorster said BC would continue to have exposure to future Nullagine operations via an ongoing royalty payment.

“Importantly, the sale will also reduce exposure for BC Iron by eliminating its rehabilitation liability, as well as monthly costs of $150k-$200k associated with holding the Nullagine interest.

“Management will also be in a position to direct additional time and resources towards maximising the value of our Buckland project, and potentially securing attractive new project opportunities.”

Fortescue said it would assess the viability of restarting operations at Nullagine.

Chief executive Nev Power said the decision to purchase BC Iron’s interest in Nullagine reflected the outcome of constructive discussions between the parties since the suspension of operations late last year.

“We have enjoyed a strong working relationship with BC Iron through the life of the Nullagine joint venture and believe this is a positive outcome for both companies,” he said.

“We will review operations over the coming months to determine the best path forward, taking into account all relevant factors including market demand and other potential opportunities to extract value from the assets.”

FMG chief executive Nev Power. Picture: Michael O'Brien/The West Australian.

BC initially struck a deal to give FMG a 50 per cent stake in its Nullagine project in 2009 in return for access to rail and port infrastructure to move ore from the stranded Pilbara project.

BC lifted its stake in Nullagine in late-2012 to 75 per cent in a $190 million deal with FMG.

https://au.news.yahoo.com/thewest/wa/a/32852872/fmg-picks-up-bc-irons-nullagine-stake-for-1/#page1

Illinois Basin coal netbacks rise on tight supply

Higher coal demand from European and Indian markets have pushed up netbacks from the US Gulf Coast, but tight volumes may keep some Illinois Basin producers on the sidelines, sources said Friday.

Export markets have picked up with increased demand from the European market, along with a "big push" out of the Indian market, an ILB producer said. "There are export deals to be had right now, but most people's volumes for [fourth quarter] are tight. You might have to defer [term] deals into next year."

ILB producers have cut production 24%, by an estimated 22.9 million st this year, according to S&P Global Analytics.

Tight supplies have backwardated prices for Q4 2016 against 2017, leaving producers unsettled on whether to sell limited amounts of export coal while deferring shipments to domestic customers, the source said.

Higher CIF ARA thermal coal prices have increased netbacks at Gulf Coast and eastern ports.

The Platts USGC netback for Illinois Basin 11,500 Btu/lb 2.9% sulfur GAR thermal coal was $59.08/st Friday, up $3.33 from Monday.

Larger producers have the option to sell tons into the export market, but how much depends on expectations of future prices that depend on winter weather, gas prices and utility demand, he said.

Wait too long for higher prices, and producers could become exposed, particularly if increased production in China lowers seaborne thermal prices, the source said.

"We'll employ the same strategy that we've always had," he said. "We don't play the market. We'll sell the coal as long as we can make money at it."

ILB coal producers also have several requests for proposals in the market to consider, the coal producer source said.

Several utilities have released solicitations, including Louisville Gas & Electric/Kentucky Utilities, which has a high sulfur RFP out for Illinois Basin coal due Tuesday. LGE/KU is seeking an unspecified amount of ILB thermal coal starting January 2018, said Mike Dotson, the company's fuel buyer.

"It's going to be interesting to see what the pricing looks like," he said.

Other solicitations include Duke Energy's RFP seeking an unspecified amount of coal for its regulated utilities starting January 1, 2017 through December 31, 2019. Offers were due September 26.

TECO Energy also has an RFP out due Thursday for roughly 500,000 st in 2017, sources said.

Platts assessed ILB 11,500 Btu/lb, physical barge coal for Cal 2017 at $35.95/st, up 25 cents from last week.

http://www.platts.com/latest-news/coal/houston/illinois-basin-coal-netbacks-rise-on-tight-supply-27683752

The European Union has set provisional import duties on two types of steel coming into the bloc from China to counter what it says are unfairly low prices, in a move likely to anger Beijing.

The duties are the latest in a line of trade defences set up against Chinese steel imports over the past two years to counter what EU steel producers say is a flood of steel sold at a loss due to Chinese overcapacity.

Some 5,000 jobs have been axed in the British steel industry in the last year, as it struggles to compete with cheap Chinese imports and high energy costs.

G20 governments recognised last month that steel overcapacity was a serious problem. China, the source of 50 percent of the world's steel and the largest steel consumer, has said the problem is a global one.

The duties will be in place eight months after the launch of respective investigations, a month earlier than would normally be the case. The European Commission has committed to speed up its trade defence actions under pressure from EU producers.

The Stoxx basic resources sub-index was by far the strongest component of the Stoxx 600, propelled by European steelmakers. Shares of the world's largest steel producer, ArcelorMittal were up 4.3 percent, ThyssenKrupp by 2.2 percent.

European steelmakers association Eurofer, which brought the complaint to the European Commission, said it welcomed the fact that the duties would be in place earlier than normal.

The duties, which will take effect on Saturday, are provisional, meaning they are in place for up to six months until the European Commission completes its investigation. If upheld, they would typically be set for five years.

No one was available for comment at a series of steelmakers in China, which was celebrating a week-long national holiday.

The duties are set at between 13.2 and 22.6 percent for hot-rolled flat iron and steel products and at between 65.1 and 73.7 percent for heavy-plate steel, according to a filing in the European Union's official journal.

The hot-rolled steel case includes Bengang Steel Plates Co Ltd and Hebei Iron & Steel Co. Ltd [HEBEIH.UL] and units of Jiangsu Shagang Group.

The heavy plate steel case covers Nanjing Iron & Steel Co Ltd, Wuyang Iron and metals Yingkou Medium Plate Co Ltd..

Eurofer said Chinese producers' share of the EU market in heavy-plate steel, used in construction, mining and shipbuilding, grew to 14.4 percent in 2015 from 4.6 percent in 2012, while the average price dropped by 29 percent over the same period.

For hot-rolled, the market share grew to 4.3 percent from below 1 percent over the same period, while import prices fell by about 33 percent.

European producers of hot-rolled steel include ThyssenKrupp, Tata Steel and ArcelorMittal, while heavy-plate is made by Tata and two unlisted German companies.

The European Commission is also investigating alleged dumping of hot-rolled steel producers in Brazil, Iran, Russian Federation, Serbia and Ukraine.

http://www.reuters.com/article/us-eu-china-steel-idUSKCN1270HF

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