Commodity Market Report
Global metallurgical coal curated long-term outlook H2 2020: A year of seismic change, but the future is built on firm foundations
Report summary
Global economies chartered a recovery path in the second half of 2020 with met coal in tow. Geopolitical tensions boiled over, leading to a ban on Australian coal into China, derailing trade. While these issues are current, we provide caution as they will be relegated to the history books when evaluating long term market trends. Recovery, albeit rebased lower, is in the cards for 2021 and beyond. Ultimately, the next several years remain in the hands of China, transitioning to a lower growth and steel intensive economy. Indian demand takes the reins from China long term. Hydrogen based steel will test coal-based steel as projects nip at the edges of demand. Expect real growth in green steel beyond our forecast. Our latest forecast shifts out to 2050. The additional 10 years reveal a widening gap between demand and operating mines – particularly for high quality coals. High prices will be required to incentivise development of deeper, costlier and likely more controversial mines.
Table of contents
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Key considerations
- The China import ban will play a minor role in the future state of markets
- Covid legacy a hiatus for demand rather than a long-term drag
- Decarbonisation an existential threat, but caution required
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H2 2020 forecast at a glance
- DEMAND
- SUPPLY
- Covid-19 impacts on forecast
- Decarbonisation and green steel considerations in base case
- Base case scrap use
- Hydrogen-based DRI
- Hydrogen replacement of PCI
Tables and charts
This report includes 1 images and tables including:
- Queensland HCC Benchmark - US$/t (real 2020$)
What's included
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