Commodity Market Report

Global metallurgical coal short-term outlook December 2020: Import ban stalemate prompts Australian coal exporters to pivot

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31 December 2020

Global metallurgical coal short-term outlook December 2020: Import ban stalemate prompts Australian coal exporters to pivot

Report summary

The duality of the current market is high metallurgical coal spot prices to China and low prices elsewhere, caused by China’s Australian coal ban. Buyers in China sought replacements around the globe, but supply is tight. The resale of some cargoes, destined for Chinese ports, are keeping a lid on FOB Australia prices. On the supply side, many Australian mines are extending their holiday outages on the low pricing structure. In other supply regions, most producers wish they had more coal available to reap the strong China prices for short-term gains.

Table of contents

    • Australian cargoes in China remain in port purgatory
    • Price relativities reach new divergence level
    • How long will the Australian ban last?
    • How will pricing dynamics play out
    • Discount resale cargoes cast shadow over market
    • Domestic coal market remains red hot, pulling up CFR China pricing further
    • With growing ex-China demand, FOB Australia prices to marginally recover
    • China: strong steel supply supported by ample domestic demand and a return to net exports
    • China: steel demand remains strong for first half of 2021 before contractions over second half
    • China: domestic coke prices expected to maintain rally, with coke in short supply
    • India: metallurgical coal imports to remain firm in the near term
    • Japan: strong domestic demand lifts another idled blast furnace to service
    • Southeast Asia: regional steel demand continues bull run
    • Europe: UK reaches a trade deal with EU as Brexit comes to reality
    • Australia: Queensland’s met coal throughput marginally down in November
    • Australia: Anglo settles at 17 Mt of metallurgical coal production in 2020
    • Australia: Sojitz waits for price improvement before green-lighting projects
    • China: Domestic supply tightness to persist in the run-up to the Chinese New Year
    • Mongolia: Covid outbreaks keep truck deliveries to China low
    • Mozambique: Vale’s Moatize upgrade on track for February 2021 completion
    • USA: Arch Coal inks contract for Leer coal to China

Tables and charts

This report includes 3 images and tables including:

  • Infection rate versus hot metal production
  • Cost versus spot price (US$)
  • Key prices - history & quarterly forecasts (US$/t nominal)

What's included

This report contains:

  • Document

    Metallurgical coal markets - short-term outlook data - Dec 2020.xlsx

    XLSX 612.80 KB

  • Document

    Global metallurgical coal short-term outlook December 2020: Import ban stalemate prompts Australian coal exporters to pivot

    PDF 887.02 KB