Commodity Market Report

Global metallurgical coal short-term outlook September 2020: price recovery begins in earnest

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The metallurgical coal market made an an abrupt turn, as LV Australian HCC spot prices climbed by nearly 30% from a recent low in August. The expectation for an easing of China’s import restrictions encouraged traders to book cargoes. Outside of China, numerous blast furnace restarts - many responding to the return of automotive production - freshened seaborne coal demand. Supply remains relatively tight, with lowered Australian exports and news of a dragline overhaul at a major premium coal brand mine leading to improved prices. Additional market tension surrounds the increased possibility of a difficult wet season in Queensland. We are optimistic the late-year trade landscape will hold continued demand and price improvements. India, realising recent capacity utilisation gains at major mills, will soon exit the monsoon season, requiring additional imports on festival induced demand. Risk remains from a second wave of coronavirus and China's ultimate move on import quotas.

Table of contents

  • Potential import restriction softening and supply availability power up markets
  • Buyers thinking twice about spot cargo bid strategies
    • 1. Declining import restriction risk and steady demand support price rise
    • 2. Ex-China demand, led by India, continues to gain momentum in Q4
    • 3. Potential for supply to underperform in Q4
  • Low case: easing of import restrictions fails to materialise
  • PCI producers given lifeline as Q3 contracts settled
  • Australia:Queensland’s met coal throughput to slip further
  • Australia: Dragline overhaul announced for Saraji
  • Australia: Kestrel’s 2020 production target falls
  • Mozambique: Moatize plant maintenance now scheduled for November
  • China: domestic coal mines face tightening
  • Russia: Kolmar moves on new mine complex
  • US: Met exports rebound strongly in July
  • Steel demand remains lower than pre-pandemic, but improving
  • India: demand set to steadily improve
  • Japan: autos power renewed demand strength
  • South Korea: construction and autos lead the way
  • Vietnam: Hao Phat Steel increasing output with new blast furnaces
  • USA: Cleveland Cliffs buys ArcelorMittal, landing back in the coal business
  • World: Blast furnaces returning in numerous areas around the globe

Tables and charts

This report includes 7 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)
  • Q4 2020 Global Supply vs Demand

What's included

This report contains:

  • Document

    Metallurgical coal markets - short-term outlook data - Sept 2020.xlsx

    XLSX 677.13 KB

  • Document

    Global metallurgical coal short-term outlook September 2020: price recovery begins in earnest

    PDF 981.54 KB