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Adjusting to a new metallurgical coal pricing system: Quarterly contract price round-up Q2 2017


Adjusting to a new metallurgical coal pricing system: Quarterly contract price round-up Q2 2017

Report summary

Quarterly hard coking coal contracts signed for Q2 2017 represent the start of a new era: life without bilateral price negotiations. The change has undoubtedly been disruptive, and there remains uncertainty over how price negotiations, and price formation, will develop over time. At this stage the impacts seem to be most keenly felt amongst small and mid-sized companies, that relied on the certainty provided by the industry's price-makers. Time will tell whether there are any real winners or losers, or whether the long-term effect is limited to just more complicated accounting. But in the short term there have been some observable impacts that are making life difficult, especially for the trade's price-takers. In this insight, we take a look at some of them.

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This report includes 2 file(s)

  • Adjusting to a new metallurgical coal pricing system: Quarterly contract price round-up Q2 2017 PDF - 255.27 KB 3 Pages, 0 Tables, 0 Figures
  • Insight metallurgical coal quarterly price settlement Q2 2017.xls XLS - 196.50 KB

Description

This Coal Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

Participants, suppliers and advisors can use it to look at the trends, risks and issues within the coal industry and gain an alternative point of view when making decisions.

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

  • 1. Provisional pricing is here to stay
  • 2. Transparency has declined
  • 3. Finalising PCI and SSCC prices is proving difficult
  • 4. Development of indices and derivatives should accelerate
  • 5. Price relativities will be changeable until new price mechanism settles down
  • China continues to drive stronger pricing
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