Met coal outlook
This Coalhub report forecasts met coal prices will remain low and then “rebalance” between 2017-2019.
The latest quarterly contract settlement of $93/t is expected to shake up the market. Seaborne met. coal exports are forecast to fall this year, due to reductions from US, Australia and Canada.
Chinese import demand is forecast to fall in 2015 and 2016, which will prevent a significant price recovery.
Average unit metallurgical coal costs are projected to fall by an average 19% y/y in 2015. However, further cost reductions will be difficult to achieve.
More supply displacement is required in the next few years for the market to rebalance. US exports are forecast to fall by 40% between 2014-2019.
The market is projected to rebalance between 2017-2019 and CRU’s price forecast for premium hard coking coal in 2019 is $126/t, FOB, real 2014$.