Metallurgical coal prices tumble: Coronavirus impact on bulks week ended 1st May

Distressed and re-sold cargoes prompted further metallurgical coal price falls. Low demand and prices are now a greater threat to metallurgical coal supply than coronavirus cases. Still, no major new mine disruption outside US, but miners are reviewing plans. Thermal coal prices also continue to weaken as supply corrections have been insufficient to balance the market amid high stock levels. Calls for supply restraint in China, such as a 10% production cut, and early signs of production cuts in Indonesia offers some hope of forthcoming price support. In contrast, iron ore prices keep bubbling along in the mid-US$80/tonne range. But there is only so much that China’s steel industry can do while the rest of the world slides towards the abyss, and our view is that seaborne market dynamics will deteriorate significantly from mid-year.