Commodity Market Report

Global metallurgical coal short-term outlook August 2017: Supply concerns prolong the bull run

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01 September 2017

Global metallurgical coal short-term outlook August 2017: Supply concerns prolong the bull run

Report summary

Widespread mine safety checks in Shanxi have constrained production again in China, pushing domestic coal prices to new highs, with more likely to come. Chinese buyers have actively sought seaborne coal again this month, with hot metal and coke production still very high. Prices for premium hard coking coals have surged through US$200/t, and could go higher in September. International miners are doing what they can to meet demand, but are struggling to meet the need for greater imports into China, the EU, India and Brazil. However, slowing Chinese steel demand, and environmentally-driven production cuts at steel and coke plants from as early as October, should see a softening in coal demand and lower prices towards year end, and into Q1 2018. Average 2018 prices will be lower than this year, but we have increased our price forecast to over US$145/t for next year to account for continued high coal demand in China, and greater constraints on Chinese coal supply.

Table of contents

    • Key market data
    • The winter will bring a change in fortunes
    • Prices will fall, but more slowly than we previously forecast
    • Coal import restrictions into China are a growing risk
      • Key prices – history and forecast, US$/t nominal
    • Russian supply hurt by flooding
    • Mine accidents and geological conditions affecting Chinese coal production
    • US supply breaks the 20 Mt barrier in H1
      • Mission Coal producing again at Oak Grove
      • Corsa opens another low-volatile mine in Pennsylvania
      • Arch Coal sells Lone Mountain to Revelation
    • Canadian exports boosted by mine restarts
    • Chinese government moves to curb Mongolian imports

Tables and charts

This report includes 7 images and tables including:

  • Queensland metallurgical coal exports
  • Executive summary: Table 1
  • Global and Chinese steel production, Mt
  • Steel production – other majors, Mt
  • Global and Chinese blast furnace iron production, Mt
  • Blast furnace iron production – other majors, Mt
  • Prices: Image 1

What's included

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    Global metallurgical coal short-term outlook August 2017: Supply concerns prolong the bull run

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