Commodity Market Report
Global metallurgical coal long-term outlook H1 2020: Pandemic forces backward step, but better days ahead
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The best laid plans often go awry, is an old phrase that neatly applies to 2020. After a solid start to the year, the Covid-19 pandemic has knocked the metallurgical coal markets off their feet, essentially eliminating three years of trade growth. Despite the potential for a rapid rebound in 2021, the effects linger through the forecast, manifesting as lower overall demand through 2040. The mid-term outlook is now more opaque, as an uncertain recovery combines with China's transition to a lower growth, lower steel-intensity future. Ultimately however, urbanisation in India and south-east Asia propels demand to new highs. Hydrogen based steel production will emerge as a worthy competitor to coke, but in this timeframe manages to trim the edges of demand, rather than undermine its foundations. The need for projects is still very large in this update, and a constrained project pipeline - particularly for high quality coals - ensures that prices rise to levels far higher than today.
Table of contents
- H1 2020 forecast at a glance
- Covid-19 impacts on forecast
- Decarbonisation and green steel considerations in base case
- H1 2020 price forecast overview
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Forecast breakdown
- 2020-2023: Post-Covid-19 recovery undermined by China steel trend
- 2024-2030: India’s influence grows but need for projects pushed out by Covid-19
- 2031-2040: Demand accelerates, deepening supply needs
- Key trends
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Supply forecast overview
- Australia
- United States
- Canada
- Russia
- Indonesia
- Mozambique
- Overview
- PCI in high demand long-term, but pricing is fragile
Tables and charts
This report includes the following images and tables:
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Benchmark HCC-US$/t Real 2020$Supply by coal typeDemand versus operating capacity (with disruption)
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Incentive price curveSupply change by countryLong-term Chinese crude steel, hot metal, coke production and coal importsDemand change by countryBreakeven curveCash cost curve
What's included
This report contains:
