Commodity market report
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12 Pages

A return to marginal costs: Global metallurgical coal long-term outlook H2 2016

A return to marginal costs: Global metallurgical coal long-term outlook H2 2016

Report summary

After a sharp rise in metallurgical coal spot prices in H2 2016 to over US$300/t driven by China’s 276 workday/year restriction, global supply is returning. China relaxed its work rule, Australian longwall mines have returned and others globally are expanding. We expect prices will return to near marginal costs over 2017, rising to about US$120/t by 2035.

What's included?

This report includes 3 file(s)

  • A return to marginal costs: Global metallurgical coal long-term outlook H2 2016 PDF - 373.34 KB 12 Pages, 0 Tables, 10 Figures
  • cms met coal prices data H2 2016.xls XLS - 2.07 MB
  • Presentation global metallurgical coal long-term outlook H2 2016.pdf PDF - 1.81 MB


Global coal markets are facing extraordinary challenges and uncertainties. Factors such as global overcapacity, weakening demand and falling prices have created cautious investors. These factors have caused delays and cancellations of many mine and infrastructure projects, as well as lower growth rates at others.

This Metallurgical Coal Market Long Term Outlook report gives global and regional coal producers, consumers, transporters and investors detailed supply, demand and price forecasts for the coal industry, covering all the key domestic markets in North America, China and India.

Use this report to gain a better understanding of market dynamics, including revenue and demand potential for different coals. It will also help you identify trade patterns and changes affecting the metallurgical coal markets.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets. Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future investments.

From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • Prices
    • Prices will stay elevated into 2017, but return to global marginal cost
      • Returning supply should re-balance market quickly
      • Prices will stay flat through the mid-term due to sluggish demand
        • Incentive price (adjusted to HCC benchmark), US$/t real 2016
      • Price banding, a new feature of this update
        • High/low price ranges: FOB Queensland LV HCC (US$/t, real 2016)
  • Supply
  • Demand
    • Two countries dominate demand story:China in near term and India in long term
      • We expect global demand to rise by 70 Mt to 2035
        • Global Seaborne Demand Forecast 2016 to 2035 (Mt)
      • Chinese domestic supply pivotal to seaborne met trade growth
      • Chinese steel demand will fall
      • Steel and hot metal production will also fall
      • China’s mining reforms will continue to influence global trade
      • India still of primary importance, despite downgrade to long-term forecast growth
  • Risks and uncertainties
    • More upside than downside risk
      • China’s moves to control domestic production likely to add uncertainty
      • India’s steel production growth could develop more slowly
      • A stronger US dollar would lower US$ mining costs in other supply regions

In this report there are 10 tables or charts, including:

  • Executive summary
  • Prices
    • Prices: Image 1
    • Prices: Image 2
    • Prices: Image 3
    • Prices: Image 4
    • Prices: Image 5
    • Prices: Image 6
    • Prices: Image 7
    • Prices: Image 8
  • Supply
    • Supply: Image 1
  • Demand
    • Demand: Image 1
  • Risks and uncertainties
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