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