Ex-China crude steel production showed better growth in May. Korea in particular grew quite strongly and Japan was flat YoY after VAT induced weakness in the broader economy in April. The EU showed small, but decelerating gains in the month.
Crude steel production in countries which are dependant on imports of coking coal has been growing at ~2-3%YoY in the last few months. While this isn't shooting the lights out, it is reasonable given the slowdown in countries like India and Brazil and the more recent headwinds in Japan
European output continues to grow, although the levels are weak given the dreadful comparison period of 2013. Output is now noticeably below 2012 levels and is along way from those in 2011, which was hardly boom times.
Met coal exports continue to grow in the last few months, largely as tonnages from Australia continue to be strong as producers look to productivity gains to cut costs.
Against this backdrop, its easy to see why coking coal prices have been stuck at low levels
There has been less of a push into China in the last few months, although ex-China's ability to absorb additional supply looks stretched, with inventory now likely to be relatively high.
So the realignment of seaborne met coal markets is still an ongoing process. The downside risks to prices now look much more limited, but recovery is going to take sometime.
