More bearish coking coal price outlook seen for 2013/14: Commonwealth Bank
Singapore (Platts)--7Jun2012/945 am EDT/1345 GMT
A more bearish outlook for premium low-vol coking coal is to be expected
with price projections revised downward by 10% to $213/mt FOB Australia for
2013 and 5% to $205/mt FOB for 2014 due to supply growing faster than demand,
a Commonwealth Bank research report released Wednesday said.
Previous forecasts for the next two years had been at $237/mt FOB and
This compares with current spot prices of $222.50/mt FOB, according to
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Demand will fall in the next two years, with global steel mills growing
at a "more moderate pace than we had expected," the report said.
The exceptions were China and India which would continue to support
global coking coal demand due to limited domestic availability, the report
China's steel industry, in particular, was "more resilient than rest of
the world" with output at the end of 2012 expected to be "some 2-4% higher
than in 2011," based on forecasts by Commonwealth Bank.
The bank's lower price expectations were based on coking coal supply,
which was "growing faster than demand," the report said. In particular, this
medium- term supply growth "should be dominated by Australia, Mongolia,
Mozambique and China's Shanxi province."
Lachlan Shaw, the author of the report, told Platts Thursday that his
forecast for the price in the fourth quarter was that it might be around
$215-220/mt FOB Australia. Much hinged on the BMA strike situation, Shaw
said, "the big watch point for coking coal is supply."
Demand for coking coal could be a touch stronger in Q4 should the
eurozone not implode and the Chinese continue their "pro-growth policy
stance," Shaw added.
--Edwin Yeo, firstname.lastname@example.org
--Edited by Jonathan Dart, email@example.com