Global metallurgical coal short-term outlook April 2020: Batten down the hatches Report

Commodity Market Report 30 April 2020

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Report summary

China's ability to absorb excess cargoes was taken beyond its limits this month as redirected cargoes from India - and surprisingly Japan - competed for sales. Suppliers in Australia, Canada and Russia have avoided large-scale disruption from coronavirus infections, and the catastrophic demand losses in India have meant they are now competing aggressively to secure a home in the only market that is open for business. Prices are now in the cost curve for all metallurgical coal types. Unfortunately there is likely worse to come in May while India and Japan continue to defer shipments and the major miners still enjoy reasonable cash margins. India will return at some point in May and a tentative recovery will begin, but it will take some months before stability is restored, and that of course depends upon the disciplined containment of the next phase of the pandemic.

What has changed?
How low can prices go?
How will this downturn differ from 2015-16?
What does the future hold?
No escaping the pain for PCI
Australia: Q1 reports show weaker supply, with more uncertainty to come
US: mine idles slowed after the start of April
US: HVB prices have showed more stability than HVA
Mozambique: Moatize at risk with wash plant upgrade delayed
New Zealand: Stockton resumes production
Indian lockdown takes heavy toll
Japan outbreak setback has dire consequences for met coal trade
South Korea contains outbreak but demand decay spreads
Demand damage remains as Europe cautiously starts to reopen economy

Tables and charts

This report includes 9 images and tables including:

HCC margins at US$110/t
PCI operating margins at US$78/t
Key Prices - history & quarterly forecasts (US$/t nominal)

Australian met coal production reported by company (Mt)
BMA quarterly production (Mt)
Global and Chinese crude steel production (Mt)
Crude steel production – Ex-China producers (Mt)
Global and Chinese blast furnace hot metal production (Mt)
Blast furnace hot metal production – Ex-China producers (Mt)

What's included

This report contains:

cms_metallurgical_trade_short_term_outlook_april_2020.xls

XLS 3.25 MB
Global metallurgical coal short-term outlook April 2020: Batten down the hatches

PDF 947.61 KB