can the new coal blending trend save CMK?"Our largest competitor in the met market is Australia, and with their dollar down 15% it's a gift they are using against us," Thrasher said at the Coaltrans USA event on Thursday. Australia, Canada and latest seaborne entrant Mozambique are all closer than eastern US-based coalfields to the biggest growth markets in eastern Asia and India. The market is globally oversupplied, and there is little the US can do about it, agreed conference participants. Major met coal exporter Alpha Natural Resources may lower the high end of its 2014 met coal sales guidance of 20 million-21 million st, Lucas Pipes of Brean Capital said Monday ahead of company earnings this week. A further weakening in the coking coal benchmark from the current all-time lowest quarterly price of $143/mt FOB Queensland is a talking point. Sentiment from traders, miners and buyers at the event seemed resigned to a lower benchmark price for Q2 2014. "The tone was as bearish as we have seen at any conference since 2009," Cowen analyst Daniel Scott said in a note to clients Monday. "In particular, views on seaborne met were especially cautious, with widespread expectations that already weak benchmark is likely to weaken further." Spot prices for premium low-vols seen in trade to China have hovered around $125/mt FOB Queensland for several weeks now. Miner BHP Billiton offered March loading contract cargoes of benchmark Peak Downs at $135/mt FOB Queensland. Before the slide to $143/mt, the Q4 2013 benchmark was at $152/mt, as the reference price recovered from Q3 2013's earlier all-time low of $145/mt. Annual benchmark pricing was last seen for April 2009-March 2010 at $129/mt, which contracted from $300/mt agreed for the prior year during a commodity pricing surge. Xcoal warned that low seaborne pricing was already slowing growth in trade. "The global market for both coking coal and thermal coal continues to grow but is challenged by current market pricing," Xcoal says. SLOWER GROWTH Xcoal, which trades coal into China and India as well as into developed markets such as South Korea and Japan, expected slower growth in met coal demand. The sustainability of record Chinese import demand, was highlighted by participants. "China and India will continue to consume, and import, significant quantities of coal, however, the growth rate will slow," Xcoal said. Meanwhile, following recent environmental curbs on the steel industry in China and concerns about tapering in US quantitative easing spilling over to slow the world economy, steel consumption in China may decline, Thrasher added. More mergers and acquisitions may be a feature for the next couple of years as some miners struggle to adapt enough to the new environment. James River Coal Friday said it was exploring potential strategic alternatives for the company, which may include a capital investment or a sale of all or one or more portions of the company. The Richmond, Virginia- based group includes met coal supplier Logan & Kanawha. A panel discussion at Coaltrans spoke up about US met coal reliability and quality, but stressed the importance of price competitiveness on a delivered basis. Representatives of DTE Coal Trading, SunCoke Energy, Tata Steel's Oremco and ArcelorMittal USA comprised the panel. Scott cuts in supplies "continue to be needed but are occurring at a slower pace than necessary to balance the market. Weak met seaborne pricing appears to be becoming a longer term issue as ample supply continues to outpace demand," he said. US rail rates for exports were touted as "severely impairing US coal companies' competitiveness in the international market," Scott said. The bank expects high railroad rates for met coal exports to likely be a factor in weaker US exports in 2014. Steel companies and merchant coke makers have been shifting to lower grade products and changing ratios to reduce costs. Asian steel mills may use up to 50% semi-soft coking coal in coke blends, up from 15% earlier, with such technological advances reducing the need for high quality US coking coal, remarked Xcoal's Thrasher. New sources of natural gas as a substitute fuel to coke and PCI in steelmaking was also cited. --Hector Forster, hector.forster@platts.com --Andrew Moore, andrew.moore@platts.com --Edited by Richard Rubin, richard.rubin@platts.com It seems the new trend in met coal market is to blend high quality low vol coking coal with the semi soft variety like the one CMK has in order to reduce cost in the steel making business. If so, may be CMK can be saved.