US-based coal miner Arch Resources is actively exploring opportunities to redirect coking coal to thermal markets, CEO Paul Lang said on Thursday, as global prices of thermal coal continue to remain near historic highs.

The company has sold more than 200 000 t of metallurgical coal to thermal customers for delivery in the fourth quarter and COO John Drexler added in a conference call that Arch was working hard on identifying more crossover opportunities.

He said the group believed the fourth-quarter shipments could serve to garner further thermal market interest in its high BTU coking coal products.

“We remain staunchly committed to serving the metallurgical needs of our longstanding steel customers, but we are also happy to redirect tons to thermal customers in the absence of more value creating alternatives in the steel arena,” Drexler said.

Although stepping down from historic levels achieved earlier this year, coking coal prices remained at constructive and profitable levels, despite recessionary pressures and the knock-on effects thereof on global steel production, Lang added.

“We believe the resilience of the metallurgical markets is largely attributable to the profound underinvestment in coking coal supply in recent years."

Arch expects its coking coal sales volumes to be 7.2-million to 7.6-million tons this year. The company on Thursday again lowered its guidance. Initially, Arch expected to sell between 9-million and 9.8-million tons in 2022, but in July lowered that to between 8.2-million and 8.6-million tons, owing to geological challenges at the Leer South mine and logistics bottlenecks.

Next year, Arch could aim for ten-million tons, although the company has not provided a specific guidance yet.

During the third-quarter, Arch locked in about one-million tons of coking coal for delivery in 2023 at an average of nearly $190/t. “Given our anticipated cost structure for 2023, this business should equate to a substantial contribution to next year’s cash flows, despite constituting only 10% or so of our projected 2023 metallurgical output,” Drexler said.

Meanwhile, while coking coal markets had come under pressure in recent months, the global thermal coal market remained at near historic highs.

“These strong market dynamics are helping to buttress coking coal prices, while simultaneously creating attractive seaborne opportunities for Arch’s legacy thermal products,” Lang said.

The price for thermal coal out of Australia currently stands at $387/t and the price for thermal coal into Northern Europe at nearly $269/t.