According to Raymond James Financial Inc, coking coal exports from the US may slow after BHP Billiton Ltd and labor unions in Australia reached an accord.

Energy Department data show US shipments of the steelmaking component in the first quarter were about 17.5 million short tons up by 2.1%YoY as producers benefited from a void caused by rolling strikes at the world biggest coking coal exporter since June 2011.

The Melbourne based company said BHP and the unions, after beginning mediation July 3 and agreed on a framework that will guide the finalization of an enterprise pact.

Mr Jim Rollyson an analyst at Raymond James Financial Inc. in Houston said “There’s the fear that this has been keeping supply out of the market. You have to assume that slows down a bit.”

Mr Rollyson estimates that the global benchmark contract for coking coal could fall at least 6.7% to USD 210 per ton in the next quarter from USD 225 per ton for the July to September period because of the increased supply.

Mr Gerard McCloskey chairman of Merlin Trade and Consultancy Ltd and founder of IHS McCloskey Group a Petersfield, UK based coal market research Company estimated June 21 that harmony between BHP and its unions could pour an additional 20 million tons of the steelmaking fuel into the global market.
Force Majeure

The BHP Billiton Mitsubishi Alliance or BMA is the world biggest exporter of steelmaking coal. About 3,000 miners at seven operations stopped work for a week in March and in April, BHP declared force majeure because of the strikes and inclement weather.

Source - Bloomberg

(www.coalguru.com)