Global thermal coal short-term outlook February 2018: US$100 coal a new normal?
Thermal Coal prices have remained high in the Pacific market despite the reduced trading activity during the week-long Spring Festival holiday in China. Participants are awaiting what emerges from the ‘Two Sessions’ meeting of the Chinese Communist Party next week. That would essentially set the scene for domestic supply growth and spot price formation. Newcastle coal price index is expected to decline through the end of April slowly. Japanese contract negotiations are set to start soon and, given the current price level, we forecast JPU price to be set at higher rates than the previous contract. Spreads between Newcastle and ARA price are at high level which will provide the opportunity for Colombian coal to be sold to Pacific demand.