Global metallurgical coal outlook - Risks H1 2020

In this insight we explore the impact on our H1 2020 base case price of specific cases around supply and demand of met coal. In our high case we look at the impact of lower domestic supply of metallurgical coal in India and China. This case includes an assumption that China's coal industry immediately comes under scrutiny - reducing supply - with HCC capped at a long term rate of 220 Mtpa. We also pair back India's supply growth with a corresponding increase in demand for imported met coals. Under our low case we have looked in detail at the effects of much higher scrap availability on metallurgical coal demand. Named the 'Go Scrap' case, we assumed 100% of the steel consumed in the top 13 met coal importing countries would be available for recycling, much higher than is the case today. We assessed the knock on effect on primary hot metal production, and therefore the need for metallurgical coal.