Commodity Market Report

Global metallurgical coal short-term outlook May 2018: Supply concerns push market higher

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31 May 2018

Global metallurgical coal short-term outlook May 2018: Supply concerns push market higher

Report summary

A standoff between buyers who felt comfortably supplied, and miners who could see the market tightening, kept prices flat for most of May. But with the typical June surge in Australian exports constrained by rail maintenance, and buyers looking for July coal deliveries, the price impasse looks to be breaking. Australia's rail dispute is likely to push prices up further during June - perhaps beyond US$200/t - and the increase will have repercussions for the rest of the year. Meanwhile, China's steel and coal restructure continues to underpin international prices, and the situation is unlikely to change anytime soon. Solid demand for iron, steel and coke globally, and stuttering coal supply growth, will keep prices well above marginal cost for the rest of the year and through 2019.    

Table of contents

  • Executive summary
    • Prices to stay high throughout 2018
    • 2019 prices revised upwards
    • Australia licks self-inflicted wounds
      • Queensland met coal exports
    • US exports to China look to recapture the spirit of 2017
      • US rail bottlenecks aren't helping, but are improving
      • Ramaco and Corsa make downward adjustments to 2018 expectations
      • Contura and Alpha plan to re-merge
    • Mozambique production wobbles after bad weather
    • Canadian rail strike threat subsides
    • Russian exports following path of least resistance
    • Chinese iron and steel going strong
      • But coal imports have struggled
      • Outlook remains positive for rest of 2018
    • Steel capacity on the rise outside China
    • Positive Indian demand tempered in short term by monsoon
    • European steel sector restructure continues

Tables and charts

This report includes 9 images and tables including:

  • Key Market data (selected)
  • Key market prices
  • Key prices - history and quarterly forecasts (US$/t, nominal)
  • Global & Chinese steel production (Mt)
  • Steel production - other major producers (Mt)
  • Global & Chinese blast furnace Iron (Mt)
  • Blast furnace iron production - other major producers (Mt)
  • Supply: Image 1
  • Australian met coal exports 2015 - 2018

What's included

This report contains:

  • Document

    cms metallurgical trade short term outlook.xls

    XLS 2.62 MB

  • Document

    Global metallurgical coal short-term outlook May 2018: Supply concerns push market higher

    PDF 355.38 KB

  • Document

    Global metallurgical coal short-term outlook May 2018: Supply concerns push market higher

    ZIP 1.84 MB

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