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Global metallurgical coal short-term outlook September 2017: Prices start to fall

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02 October 2017

Global metallurgical coal short-term outlook September 2017: Prices start to fall

Report summary

Metallurgical coal prices started to fall this month in anticipation of Chinese restrictions on hot metal and coke output. Australian LV spot prices, dropped over US$20/t from mid-month. Most Chinese blast furnaces will have to cut output to under 50% of capacity during winter. Queensland coal exports were strong in August, but will be limited as the year closes due to rail and port maintenance. Spot prices should fall to US$165/t by the end of the year – driving the Q4 contract to US$183/t.

Table of contents

  • Executive summary
    • Index-pricing leads NSSMC to US$170/t for Q3 contracts
    • Second tier HCC prices fall, as demand for this coal weakens
    • Differential between PCI/SSCC to HCC strengthens in Q3
    • JFE does well with early Q3 settlements on PCI and SSCC
    • Marketplace is getting ready for hedging options to manage volatility but, a long way to go
    • Prices should continue the decline that started in mid-September
    • Queensland metallurgical coal exports
    • Appin mine slowly returns, but at lower output level
    • Baralaba plans to add LV PCI later this year
    • QCoal and JFE developing the Byerwen mine
    • Peabody sells Burton mine to New Hope
    • AMCI will reopen Broadlea in 2017
    • Donkin mine brings on first coking coal on Canada’s east coast
    • Teck production to remain steady the next few years
    • Canada’s Ridley export rise has mirrored the market changes
    • US exports remain strong, but should decline in Q4
    • Weakening US dollar lessens revenues for other local currencies
    • China’s Q4 slowdown still the biggest demand driver
    • JFE Steel idles blast furnace, but coal impact should be minimal
    • ArcelorMittal relines Bremen blast furnace
    • Japan’s coke imports have fallen with high prices
    • ThysseenKrupp and Tata Steel unite in Europe

Tables and charts

This report includes 7 images and tables including:

  • Key market data
  • Key prices – history and forecast, US$/t nominal
  • Supply: Image 1
  • Global and Chinese steel production, Mt
  • Steel production – other majors, Mt
  • Global and Chinese blast furnace iron production, Mt
  • Blast furnace iron production – other majors, Mt

What's included

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    Global metallurgical coal short-term outlook September 2017: Prices start to fall

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