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Global metallurgical coal short-term outlook February 2020 - Supply and demand drivers upended by Covid-19

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29 February 2020

Global metallurgical coal short-term outlook February 2020 - Supply and demand drivers upended by Covid-19

Report summary

The start of February was supposed to be a return to market norms after the world's biggest metallurgical coal consumer, China, returned from another joyous Chinese New Year. But, this year proved anything but happy as the Covid-19 outbreak, known as the coronavirus, spread like wildfire across the country. In its infectious wake, the Chinese central and local governments mobilised to contain the spread. Industry ground to a halt with coal mines shutting down as out of province miners faced travel restrictions. Covid-19 crippled China's domestic coal supply. Despite the virus outbreak, China's steel industry continued blast furnace production on strong margins. International supply remained tight over the month with disruptions in Australia and Canada contributing price support for premium low and mid volatile HCC. Further complicating supply was China's renewed strictness towards its import quota system

Table of contents

  • Virus impacts fully revealed after Chinese New Year
  • Customs clearances provides avenue to trader price discounts
  • Price weakens into April before demand rebound
  • PCI and SSCC spot prices enjoy moderate run-up
  • What’s the price downside of a spreading global outbreak?
  • China: domestic supply improving slowly
  • Mongolia: limited Chinese border crossings beginning 15 March
  • Australia: Anglo’s met coal output impacted by roof collapse at Moranbah North
  • Australia: Kestrel hits production record in 2019 with still more to come
  • Mozambique: Vale’s HCC output significantly down in 2019 but plan in works to address
  • Canada: Teck and CST Coal Q1 volumes drop on cold weather and rail blockades
  • USA: exports brace for weak H1 demand despite Chinese tariff exemption
  • USA: despite 2020 outlook, Warrior Coal greenlights Blue Creek mine
  • China: economic growth pinched by virus outbreak though options on the table
  • China: blast furnace production unfazed while record steel stockpiles accumulate
  • China: near-term downstream steel demand recovery linked to construction projects
  • India: companies pause steel capacity expansions on slow economic growth
  • South Korea: economic slowdown follows Covid-19 outbreak
  • Japan: structural changes in Nippon Steel facilities to affect coal demand
  • Japan: to date, few impacts to crude steel production
  • Europe: continental demand remains weak as Italy wrestles with Covid-19 outbreak

Tables and charts

This report includes 4 images and tables including:

  • Premium Low Volatile HCC monthly price forecast changes
  • Key prices - history and quarterly forecasts (US$/t, nominal)
  • Covid-19 Global pandemic scenario – Factors affecting price from April to December 2020
  • Canadian coal railcar traffic - January through February

What's included

This report contains:

  • Document

    cms_metallurgical_trade_short_term_outlook_february_2020.xls

    XLS 3.20 MB

  • Document

    Global metallurgical coal short-term outlook February 2020 - Supply and demand drivers upended by Covid-19

    PDF 1.01 MB

  • Document

    Global metallurgical coal short-term outlook February 2020 - Prices resilient as supply and demand drivers upended by Covid-19

    ZIP 2.89 MB