Commodity market report

Global metallurgical coal short-term outlook October 2016

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Report summary

Met coal prices continued on their seemingly inexorable rise in October breaking the US$250/t mark in the last week. The month began with news of Grasstree's extended disruption and ended with a similar story at Appin area 9. China's 276 workday policy remains in place and the NDRC has made no meaningful attempt to force an increase in Chinese coal production. Whilst demand in China has outperformed supply constraints remain the key factor in the price spike and there has been little to mitigate coal shortages this month. Infact recent events have led us to forecast an increase in quarterly prices for Q1 2017 to US$210/t before a combination of stagnant coal demand and supply recovery lead to a gradual decline in prices through 2017.

What's included

This report contains

  • Document

    cms metallurgical trade short term outlook October.xls

    XLS 1.97 MB

  • Document

    Global metallurgical coal short-term outlook October 2016

    PDF 362.28 KB

  • Document

    Global metallurgical coal short-term outlook October 2016

    ZIP 1.61 MB

Table of contents

    • Key market data
    • Q4 contract prices finally agreed
    • Chinese coal price rises squeezing mill margins
    • International prices set to stay high in Q1 2017
    • PCI and SSCC prices will eventually benefit from higher coking coal prices
    • Prices on a knife-edge
    • Incentives to expand but near term options limited
    • Australian exports up but premium HCC is scarce
    • Patience required for rebirth of US export supply
    • Russian coking coal exports struggling
    • Mozambique restarts encouraging but expansion muted in 2017
    • China's steel and coke production holds up, whilst coal supply flounders
    • Steel and met coke import restrictions support Indian coal import demand

Tables and charts

This report includes 9 images and tables including:

Images

  • Key metallurgical coal prices: history and forecast (US$/t)
  • Queensland ports:metallurgical exports (Mt)
  • US Hampton Roads metallurgical coal exports 2014 - 2016 (Mt)
  • Chinese metallurgical coal production and stocks
  • Global & Chinese steel production (Mt)
  • Steel production - other major producers
  • Global & China blast furnace iron production (Mt)
  • blast furnace iron production - Other major producers

Tables

  • Executive summary: Table 1

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