Global thermal coal short-term outlook January 2019: Cautious optimism to the start of new year Report

Commodity Market Report 31 January 2019

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Report summary

The seaborne thermal coal trade enters 2019 with cautious optimism, coming out of a successful 2018. Economic health across the globe, especially in China, weigh on the year's supply and demand story. Newcastle benchmark pricing held steady as off-spec coals gained with the lifting of Chinese import restrictions and ARA pricing retreated with decreasing European demand. Chinese Lunar Year celebrations in February will temporarily mute pricing and demand signals.

Pacific markets
Atlantic markets
Global
- China
- Weak demand and increasing domestic supply put the brakes on imports
- India
- Low inventories are driving a modest increase in seaborne imports
- Rising electricity generation, stimulated by policy schemes and power sector reform, boosted 2018 coal imports
- South Korea
- Coal imports facing pressure on multiple fronts
- Vietnam
- Vinacomin is at maximum mine production capacity
- EMEARC and the Americas
- Europe
- Mild weather keeps demand weak and stockpiles high
Mexico and Chile
- Competition with gas is lowering near-term coal demand
- US
- 2019 coal demand will be weakened by falling natural gas prices
Global
- China
- Coal mine accident kills 21, could remove 100 Mtpa from the market
- Australia
- Improvement in high CV production expected in 2019
- Yancoal successfully lists on the Hong Kong stock exchange
- Tension escalates between RTBU and Aurizon
- Indonesia
- Government will require domestic cargo insurance to final destination port
- Colombia
- Colombian government extends Drummond's La Loma license for 20 years
- Russia
- Russian port capacity is on the rise
- Seaborne thermal coal export growth will slow in 2019
- South Africa
- Exxaro Coal may double exports by 2023
- South African total coal exports fall short of target
- US
- A cold winter will lower coal inventories, but low gas prices will pressure coal thereafter

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Key prices – history and forecast (nominal, US$/t)

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Global thermal coal short-term outlook January 2019: Cautious optimism to the start of new year

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