Oil & Gas - Energy - Commodities - Resources (OILBRENT)

[eFinanceMarkets]

$ARCH Arch Coal (NYSE:ARCH) expects 2M-3M tons of additional domestic coking coal demand as Section 232 import tariffs on steel prompt higher steel production, Seaport Global says after meeting company executives.

"The tariffs could eventually add around 5% to overall U.S. met coal demand, all of which will be fed by U.S. producers," Seaport analysts say, adding that "increased U.S. consumption might enable producers to get prices domestically that are at narrower discounts to seaborne ones."

Arch expects potential 1%-2%/year average global coking coal demand growth through 2025, which would lead to ~40M short tons of additional coking coal supply, Seaport says, citing the company's senior VP for strategy Deck Slone.

"The real key, though, will be whether Section 232 brings meaningful retaliation from other countries and how that affects the overall market," Seaport says.