Moody’s Boosts North American Coal Industry Outlook
(17 November 2016) Despite persistent challenges, the outlook for the North American coal industry has been revised to stable from negative, Moody’s Investors Service said in a new report. A combination of fourth quarter 2016 metallurgical coal benchmark prices settling at $200 per metric ton (mt) and natural gas prices hovering around $3/MMbtu has provided immediate relief for the strained sector.
The rating agency has also revised its price sensitivity assumptions for seaborne coal prices. In the medium-term range, met coal has been lifted to $90-$130/mt from $85-$90/mt, and Newcastle Thermal assumptions have been increased to $50-$65/mt from $53-$58/mt.
“Although we do not view the recent price uptick in met coal as ultimately sustainable, we also are not expecting prices to return to the low levels seen in late 2015 and early 2016, which were themselves a function of an oversupplied market and miners still working through production rationalizations,” said Anna Zubets-Anderson, Moody’s vice president, senior analyst.