Global metallurgical coal market short-term outlook July 2022
The Queensland PLV benchmark continued dropping drastically by US$100/t in July. Met coal demand remained constrained by the sluggish steel demand and seasonal slowdowns of the blast furnaces in Asian and European countries. Even the Australian supply disruption, caused by heavy precipitation, could not ease the sharp downward trajectory. We believe the unexpected coking coal price discount to premium thermal coal prices will persist due to the upcoming Russian energy ban in the EU and a delayed coking coal demand recovery globally. We altered our metallurgical coal price forecasts downward, owing to the latest macro economy outlooks indicating uncertainties in steel demand in Q4. The risk of inflation and possible global recession led to our latest view that the Queensland PLV benchmark will be below US$250/t in winter.