Commodity market report
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13 Pages

Global thermal coal short-term outlook September 2016

Global thermal coal short-term outlook September 2016

Report summary

Years of supply rationalisation and spot prices below the marginal cost of production have left seaborne thermal and metallurgical markets unable to quickly respond to a modest, China-inspired demand shock. The result has been significant price spikes in these markets.

What's included?

This report includes 2 file(s)

  • Global thermal coal short-term outlook September 2016 PDF - 560.29 KB 13 Pages, 0 Tables, 13 Figures
  • wm coal monthly thermal trade September 2016.xls XLS - 1.62 MB


Global coal markets are facing extraordinary challenges and uncertainties. Factors such as global overcapacity, weakening demand and falling prices have created cautious investors. These factors have caused delays and cancellations of many mine and infrastructure projects, as well as lower growth rates at others.

This Thermal Coal Market Short Term Outlook report gives global and regional coal producers, consumers, transporters and investors detailed supply, demand and price forecasts for the coal industry, covering all the key domestic markets in North America, China and India.

Use this report to gain a better understanding of market dynamics, including revenue and demand potential for different coals. It will also help you identify trade patterns and changes affecting the thermal coal markets.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets. Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future investments.

From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • Prices
    • How much of the recent price increase is due to short-term rather than long-term factors?
  • Demand
    • Europe set for uncertain winter dynamics
    • Market constraints restrict coal-to-LNG switching in Japan and South Korea
    • China demand in the coming months
  • Supply
    • Increased logistics expenses drive commodity prices upward
    • Metallurgical coal prices approach bubble territory: here's why they matter for thermal coal
    • China matters: but policy direction is still not clear
    • Australian exports
    • Colombia: community and government intervention will remain an ongoing issue but producers continue to expand exports
    • US: higher natural gas prices in 2017 will increase thermal demand

In this report there are 13 tables or charts, including:

  • Executive summary
    • Key market data
  • Prices
    • Premium/discount of ARA to Newcastle (US$/t)
    • Premium/discount Richards Bay to Newcastle (US$/t)
    • Key prices: history and forecast, nominal US$/t
    • Export margin evolution over past four months (US$/t)
    • Marginal cost of production versus spot price (US$/t)
  • Demand
    • Historical Japan and South Korea switching and fuel prices (US$/mmbtu)
    • Monthly coal-fired generation (TWh)
    • China gencos daily burn (Mt)
    • Seaborne Pacific demand for thermal coal by country (Mt)
  • Supply
    • Global dry bulk capesize shipping rates (US$/t)
    • Average weekly FOB Qinhuangdao 5,500 kcal/kg coal price (RMB/t) and policy
    • Price tiers for supply increase/decrease
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