In this list
Coal | Metals

Coking coal prices may rise slowly after breaching marginal costs: sources

Metals | Steel

Platts World Steel Review

Metals | Non-Ferrous

Asian aluminum, alumina markets mixed on demand expectations, cost pressures

Oil | Energy Transition | Energy

APPEC 2024

Oil & Gas | Energy Transition | LNG | Shipping | Crude Oil | Emissions

Shippers avoiding Red Sea transits after attacks, watching Suez Canal traffic

Metals | Energy | Coal | Coking Coal

Platts Premium Low Vol Coking Coal

Metals | Chemicals | Energy Transition | Non-Ferrous | Polymers | Ferrous | Hydrogen | Renewables

Insight Conversation: Tom Campey, Hysata

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Coking coal prices may rise slowly after breaching marginal costs: sources


Met coal prices below marginal costs

US miners see uncertain pace of recovery

BHP trade may show bottom still being found

  • Author
  • Hector Forster
  • Editor
  • Jonathan Fox
  • Commodity
  • Coal Metals

London — All signs point to coking coal prices moving up, at least eventually, according to coal market executives and analysts.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Met coal demand is recovering, especially in India, and some Australian and US supply has fallen this year, leaving the market in better shape as benchmark prices fell below marginal cost.

The Platts TSI Premium HCC price settled around their lows at $107/mt FOB Australia this week, averaging just below $133/mt FOB for the year to date, and compared with $157.30/mt a year earlier.

Bank of America this month revised down hard coking prices for 2020 to $126/mt FOB, from $129/mt. This would imply imply prices for the rest of the year averaging around $115.75/mt, based on S&P Global Platts calculations.

Met coal prices are "geared to world-outside-China steel production," and affected by soft demand, Bank of America said, noting expectations for a recovery in demand in the medium term.

The latest BHP spot trade this week pricing Peak Downs premium coal at just below $109/mt FOB Hay Point may reflect the seaborne market is still searching for a bottom, ahead of a stronger global economic recovery, a coal mining executive said.

US miner Warrior Met coal said in a quarterly report Aug. 5 that it may be "premature to forecast when the economies of the countries in which its customers are located will reopen on a sustained basis and lead to a return to more normalized demand for met coal."

Global miner Peabody Energy's CEO Glenn Kellow during an Aug. 5 call with analysts highlighted uncertainty persisting in the met coal market and tough conditions for miners. Peabody cited low demand and volumes in the second quarter translating into high unit met coal costs, above current spot prices.


The seaborne coking coal market will eventually see demand recover sufficiently from India, the Atlantic and Northeast Asian contract buyers, limiting availability for spot sales to China and driving up prices, according to consensus views.

"We see met coal exposure as a good way to play ex-China steel industry recovery from current levels," BMO Capital Markets said.

Base metals may be a similar kind of trade to place, and potentially be better exposed in reacting to a global demand recovery taking hold, the bank said in a note July 29.

The seaborne met coal market may recover to a 290 million mt/year annualized rate in the fourth quarter, from around 250 million mt/year in Q2, it said.

BMO expects a possible contraction of around 30 million mt of seaborne met coal demand this year, with much of the losses already factored into the first half of 2020.

The outlook for PCI and semi-soft prices, based on a stronger global steel recovery, may be less assured, BMO said.

An oversupply in met coke limits PCI injection demand, and semi-soft seaborne trade is more contingent on a recovery in Northeast Asian steel output.

Nippon Steel, a major semis-soft user, plans to lower output this year and in Q1 2021 by more than a fifth, and is reported to be looking to hasten restructuring measures under a multi-year program revealed earlier this year.

With Japan struggling particularly badly, the semi-soft coking coal market has suffered, while steelmakers at reduced productivity utilize more coke in the blast furnace and turn down PCI rates, BMO said. Australian semi-soft/PCI exports are currently running close to multi-year lows, BMO added.

Steel production in key met coal importing regions such as the EU, Japan, India and Brazil fell sharply in the second quarter as steel orders fell during the coronavirus pandemic, even as output grew in China.

China's coking coal supplies have been ample to help meet demand for met coke, with prices staying higher than imports and the arb for premium HCC widening to over $50/mt in favor of domestic coal during the second quarter.