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Metallurgical Coal: 2013 in Review


By Julien Hall, Edwin Yeo and Kenneth Foo


February 05, 2014 - China and Australia dominated the global spot metallurgical coal market in 2013, a year which also saw less price volatility, an accelerated trend towards index-pricing, both for term and spot transactions, an uptick in traded swaps volumes, and more miners blending down premium coals into second-tier products, a review of Platts' spot data showed.


Prices Wavered


Spot met coal prices in Asia underwent a series of dips and rises in 2013, and were almost never steady through the year, but there was still less volatility than in previous years, with most product categories trading within a 30% range, down from a 35-50% range in 2012.


The year started strongly, driven by adverse weather in Australia and optimism about China’s economy.


Analysis continues below...


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In February, the market turned when China first announced real estate market cooling measures, which curbed steel demand- and therefore met coal demand, leading to a sharp destocking.


This was followed by a strong restocking drive in July-September. During this time, a number of Chinese steel and coke producers conducted early pre-winter restocking, contrasting with an October-November restock in 2012.


This early restock ultimately led to weaker demand in the final quarter of the year, sowing the seeds of another decline which has been persisting into late January.


Destock-Restock


2013 Premium Low Volume CFR China ($/mt)


Next page: Volumes Grew




Metallurgical Coal: 2013 in Review

Prices Wavered Volumes Grew China's Ascendance More Index Usage Swaps Traded Premium HCC HCC PCI

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