Commodity Market Report

Global metallurgical coal short-term outlook March 2021: Australian HCC prices retreat on razor thin trading

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31 March 2021

Global metallurgical coal short-term outlook March 2021: Australian HCC prices retreat on razor thin trading

Report summary

Prices for spot PLV cargoes steadily declined over March. A dearth of Australian cargo sales plagued the premium HCC market over the month. Without China to rely on, HCC producers in Australia looked to India to shore up the spot trade to no avail. Meanwhile, above average ocean freight rates only added to margin erosion. Despite the drop in CFR China and domestic prices, ex-Australian coal demand in China remains strong however we expect downward risk to overall seaborne coal imports from pressures to lower steel production. Mongolian landborne coal deliveries remain muted but for how long? Outside of China, Indian restocking demand leading up to the monsoon season remains crucial to support premium HCC price levels. Europe and Brazil steel demand remains strong and annual coal contracts are settled but new Covid outbreaks threaten momentum.

Table of contents

  • China: lower domestic and CFR prices but plenty of positive signals
  • Outlook: FOB Australia index to remain fragile
  • China: Tangshan steel cuts and China ban a malevolent force through 2021
  • Risks to our forecast
  • Australia: Queensland’s met coal throughput to bump up in March
  • Australia: Vitrinite set to open a HCC mine in Queensland
  • Canada: CST to reopen Canadian mines
  • US: exports fall on Australian competition
  • US: United Coal increases production at Affinity
  • US: Allegiance Coal starts new HV mine in Colorado
  • Russia: projects get support – from the top
  • February global steel rises over 2020, but northern Europe slows with cold weather
  • China economy to weave in latest Five-Year Plan
  • India should return to the market for pre-monsoon restocking
  • Japan, South Korea and Taiwan demand slows on automotive and lower-priced coke imports
  • Europe/UK steel improved to pre-Covid levels
  • Rising Covid cases provides some steel demand risk in Europe

Tables and charts

This report includes 6 images and tables including:

  • Key prices - history & quarterly forecasts (US$/t nominal)
  • Queensland ports: Metallurgical coal exports (Mt per month)
  • Global and Chinese crude steel production (Mt)
  • Crude steel production – Ex-China producers (Mt)
  • Global and Chinese blast furnace hot metal production (Mt)
  • Blast furnace hot metal production – Ex-China producers (Mt)

What's included

This report contains:

  • Document

    Metallurgical Coal Markets Short Term Outlook Data Mar 2021

    XLSX 632.92 KB

  • Document

    Global metallurgical coal short-term outlook March 2021: Australian HCC prices retreat on razor thin trading

    PDF 953.34 KB