BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to: Latest news headlines Analytical topics and features Commodities videos, podcast & blogs Sample market prices & data Special reports Subscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

IF you are a Platts Market Center subscriber, to reset your password go to the�Platts Market Center to reset your password.

In this list
Coal

Analysis: US coking coal hit by tariffs: $15-18/mt for Turkey, more for China

Crude Oil |

2018 Brent crude oil volatility: September outlook

Coal |

Platts Global Coal Alert

Natural Gas | LNG | Oil | Crude Oil | Refined Products | Petrochemicals |

Platts Workshop at the S&P Global Platts Energy

Coal |

Atlantic met coal prices stable as contract deal making continues

Analysis: US coking coal hit by tariffs: $15-18/mt for Turkey, more for China

London — The impact of a 25% import tariff put in place this week on US coking coal in China, and an earlier announcement of a hike in taxes on US coking coal to 10% in Turkey, may be significant enough to halt trade into these markets given the added cost and complications to financing trade.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

For shipments to Turkey, the taxes may add around $15-18/mt on top of FOB prices for US coking coal grades, according to S&P Global Platts calculations using 10-day average FOB prices for the indexes.

The US exported 1.33 million mt of coking coal to Turkey in the first six months of 2018, a 38% year-on-year increase, according to US Census Bureau data. In 2017, the US exported around 50 million mt of coking coal.

US coal such as that sold as mid-to-high vol blends, as well as straight mine branded coals, and premium low-vol and mid-vol grades may trade for deals involving Turkish buyers with reference to high-vol and low-vol US East Coast FOB indexes, as well as premium HCC FOB Australia indexes.

Tenders may lead to a preference for pricing spot coal under fixed prices, while indexes may help shape offers and alternative pricing options.

In China, US coal is now exposed to an overall 28% import tax, as of Thursday, building on a 3% tariff in place previously. US coking coal exports to China in the the first half of 2018 rose 25% year on year to 1.68 million mt, the data show.

US met coal would incur additional pricing, which may be around $48-$53/mt based on key delivered price market indexes.

Chinese buyers may reference Platts China CFR indexes, for HCC 64 and Premium Low Vol grades, for imports, including from the US.

A single point of comparison may aid trade performance and discharge certainty, as varying regional FOB prices could stump trade into China, which alongside Japan and India, is part of the triumvirate of largest coking coal importers globally.

Trading appetite for these markets amongst miners, traders and their supporting banks and shipping companies may have been hit by financial risks.

As the value of the Turkish lira depreciated and Chinese risks increased, alternative coking coal markets with demand may lead banks to limit their credit exposure to trade into Turkey and China.

Banks typically issue letters of credit where payment is due before discharge, on pricing either on FOB or CFR terms. Terms and conditions releasing funds are usually based on performance at coal loading, according to traders.

One source said US banks had pulled back issuing letters of credit for met coal sales to Turkey, regardless of bilateral price agreement. Trading basis cash against document terms, or open credit terms may permit trade, another source said.

Turkey and China have increased tariffs on US coal imports in response to US tariffs on steel, and amid a wider trade spat with China.

--Hector Forster, hector.forster@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com