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Global metallurgical coal short-term outlook February 2018: Prices stubbornly high as supply risks mount

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01 March 2018

Global metallurgical coal short-term outlook February 2018: Prices stubbornly high as supply risks mount

Report summary

Traditionally a quiet month as China celebrates the New Year, this February has been notable for the increase in metallurgical coal supply risks. Chinese mine production has been weak, as expected, but it is Australia that has had the most visible problems. Rainfall has been well above the February average, and the emerging dispute between Queensland's network operator, Aurizon, and the system regulator, is likely to affect supply in the short-term, even if a compromise is reached prior to the Queensland Competition Authority's final decision in March. For the remainder of 2018, the Two Sessions meeting in China during March will provide important guidance as to the Government's approach to pollution control and supply reform. We have increased our forecast prices for Q2 2018 on the basis of recent supply issues, but will await the outcome of the Two Sessions conference before reconsidering our forecast falling price trend for the subsequent eighteen months.       

Table of contents

  • Executive summary
    • Supply constraints the dominant force
    • Two Sessions in March a signpost for 2018
    • Aurizon Network tariff dispute already crimping railings
      • Queensland Ports: Metallurgical coal exports (Mt)
    • Inflationary pressures beginning to flow into miner results
    • Indonesian mining sector struggles to get house in order
    • Exporters jostle to benefit from Europe's shifting coking coal supply
    • US exports rise in January
      • Ramaco continues to ramp up production
      • Warrior Met Coal slight production rise in 2018
    • China looking to a post holiday surge
    • Infrastructure spend and return of restructured buyers gives hope for Indian demand
    • US section 232 a threat to EU steel production this year
    • Brazil's Usiminas to restart Blast Furnace No. 1

Tables and charts

This report includes 9 images and tables including:

  • Key market data (selected)
  • Jellinbah Rainfall: 2018 versus historical
  • Moranbah Rainfall: 2018 versus historical
  • Key Prices - history and quarterly forecasts (US$/t, nominal)
  • Global and Chinese Steel production (Mt)
  • Steel production - other major producers (Mt)
  • Global and Chinese blast furnace iron production (Mt)
  • Blast furnace iron production - other major producers (Mt)
  • Supply: Image 3

What's included

This report contains:

  • Document

    cms metallurgical trade short term outlook february 2018.xls

    XLS 2.47 MB

  • Document

    Global metallurgical coal short-term outlook February 2018: Prices stubbornly high as supply risks mount

    PDF 363.78 KB

  • Document

    Global metallurgical coal short-term outlook February 2018: Prices stubbornly high as supply risks mount

    ZIP 1.85 MB

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