Contract prices for metallurgical coal are likely to remain subdued in the short term, according to National Australia Bank (NAB), as demand for seaborne metallurgical coal weakens on falling Chinese imports.
Chinese imports of metallurgical coal totaled 28 million in the first seven months of this year – down 22% on the same period in 2014. Further weakness in China’s steel industry will see import levels drop further through the rest of this year, said the bank.
In response to the weaker demand, growth in Australian exports of metallurgical coal have slowed. In 1H15, Australian exports grew by just 1.1% y/y to 91 million t, compared to growth of 9.8% in 1H14.
Other exporters have seen volumes drop this year with US metallurgical coal exports down almost 17% y/y in the first five months of 2015 and Canadian exports down by over 12% y/y over the same period.
The NAB forecasts average contract prices of US$102 per tonne this year and US$93 per tonne in 2016.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/09092015/met-coal-prices-to-remain-subdued-through-2016-2832/