Metallurgical coal price plunge: Where is the support? Report

Insight 08 August 2019

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What’s inside this report?

A deep-dive into hard coking coal (HCC) price dynamics.

It is commonly accepted that US$200/t prices for seaborne HCCs are unsustainable. But the market had become accustomed to sky high prices.

After prices plunged to below US$160/t in early August, we explore the obvious question: when will prices stabilise?

We also look at the four main reasons behind the price drop.

Why buy this report?

Get answers to all your questions about HCC prices, including:

What can we expect for the rest of the year? And how will the US-China trade dispute affect the market?
When do we think prices will recover?
What are the key risks to short-term prices?

Report summary

The plunge in premium HCC prices to below US$160/t in early August has caused market participants and observers to sit up and take notice, after the relative stability of early 2019. The metallurgical sector is facing a plethora of negative forces, not least the burgeoning interventions of the Chinese authorities. As spot prices fall to multi-year lows, we look at the reasons behind the plunge, how long it might last, and where short-term prices are likely to find resistance.

Introduction
- Four reasons for the price fall
- 1. Chinese port restrictions
- 2. Seasonal demand slowdown
- 3. Improved supply availability
- 4. Economic reality
- Where is the price support?
- What can we expect for the remainder of the year?
- Supply will come under more pressure in Q4
- Import activity should also pickup
- The US-China dispute is a doubled-edged sword

Tables and charts

This report includes 2 images and tables including:

Hay Point versus Luilin Price equivalence
HCC total cash cost curve 2019 (US$/t FOB), adjusted

What's included

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