Commodity Market Report

Global metallurgical coal short-term outlook March 2019: Trade under influence of competing Chinese forces

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March was a month of anxiety for coal exporters, as Chinese port restrictions evolved and spread across provincial boundaries. Coking coal fared better than thermal, but China's policy regarding Australian shipments remains the biggest source of metallurgical coal market uncertainty. Policy direction after the 'two sessions' offers hope for demand in China, and with India continuing to need more metallurgical coal, we expect there to be enough new import demand to keep prices high for premium hard coking coals, even while coke prices fall. A more balanced Chinese coal market after April, and modest export increases out of Australia should see prices come off their current highs. A deeper and longer ban on Australian shipments could undoubtedly see prices fall faster, but we don't expect any meaningful change in trend until next year. And even then, there is likely to be enough support to keep benchmark prices above US$180/t.

Table of contents

  • China: Soft demand pressuring short-term prices
  • "Two sessions" giveaways to support demand in 2019 but no guidance on import restrictions
  • Outlook remains supportive of high prices
    • Queensland's export performance variable in 2019
  • North Goonyella restart will help Australian supply expand in 2020
  • Mozambique's Cyclone Idai has limited impact on met coal exports
  • Ramaco adds to plans for more US HVA production
  • JSW Group plans for new Polish mine
  • Murray Energy to purchase most of the Mission Coal assets
  • Two sessions offers glimpse of Chinese government thinking
  • China’s port curbs an obvious downside risk to demand in 2019
  • Indian Steel production growing but end use sectors showing mixed signs
  • ThyssenKrupps diversifies coal delivery options to German plants

Tables and charts

This report includes 5 images and tables including:

  • Global and Chinese crude steel production (Mt)
  • Crude steel production - other major producers (Mt)
  • Global and Chinese blast furnace hot metal production (Mt)
  • Blast furnace hot metal production - other major producers (Mt)
  • Queensland Ports: metallurgical coal exports (Mt)

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    Global metallurgical coal short-term outlook March 2019: Trade under influence of competing Chinese forces

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