press-release Market Intelligence /marketintelligence/en/media-center/press-release/australias-metallurgical-coal-production-on-the-rise-through-2022 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

Australia's Metallurgical Coal Production On The Rise Through 2022

Main driver behind increase in production points to sustained recovery in prices

Brisbane, Australia, Oct. 18 2018 — Robust steel demand from China, India and Japan, which accounted for 70% of Australia’s metallurgical coal demand in 2017, will contribute some stability to seaborne prices, according to the latest S&P Global Market Intelligence analysis presented at the Brisbane Resources Round-up 2018 conference.

Richard Foy, Senior Research Analyst at S&P Global Market Intelligence said, “We expect to see Australia’s metallurgical coal production to increase from 182Mtpa in 2018 to 195Mtpa by 2022, due primarily to the ongoing price recovery encouraging both greenfield and brownfield developments. A potential risk to supply comes from the increase of thermal coal prices incentivizing producers to switch metallurgical coal products to a premium thermal product.”

Key conclusions from the analysis include the following:

  • Declining prices caused Australian miners to focus on low cost production: higher-cost assets were suspended or shut down, capital expenditure was cut back and operations were streamlined.
  • Growing and sustained steel demand from primary markets, alongside pollution cuts in China, drove increased coal requirements for Australian coal products.
  • Increase in metallurgical coal production will be coming from both brownfield developments and incoming greenfield projects
  • Modest cost inflation is expected at Australian metallurgical coal mines in 2018 with normalised production costs stabilizing and declining by 2% from 2018 to 2022, attributable to economies of scale with upcoming new operations and expansions, along with the consensus forecasts expecting the Australian dollar to weaken against the US dollar.
  • Stable steel producer margins will incentivize continued growth in capital expenditure throughout the steel supply chain.
  • Stronger prices will encourage swing producers; the challenge for Australian suppliers is to raise production in a cost-effective manner that does not oversupply the market.

Graph 1: Normalized Total Cash Costs / Production / HCC Price

Data as of September 2018
Source: S&P Global Market Intelligence, S&P Global Platts. For illustration only.

Mr. Foy added, "The decline in prices since 2011 forced Australia’s coal miners to make significant cost savings to preserve margins, the recovery in prices since 2015 also saw a concurrent increase in costs largely from rising oil prices and appreciation in the Australian dollar. Looking forward, we expect costs to stabilize. If the prices follow the consensus forecasts for coking coal, high cost Australian operations could come under pressure to exit the market due to negative margins in 2020.”


– END –

About S&P Global Market Intelligence

At S&P Global Market Intelligence, we know that not all information is important—some of it is vital. We integrate financial and industry data, research and news into tools that help track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuations and assess credit risk. Investment professionals, government agencies, corporations and universities globally can gain the intelligence essential to making business and financial decisions with conviction.
S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). For more information, visit www.spglobal.com.

Learn more about Market Intelligence
Request Demo

Media Contact

Vivian Liu, S&P Global | Market Intelligence
P.   +852 2841-1007
E. vivian.liu@spglobal.com

Subscribe to Press Releases

Submitting your email above means you agree to the Terms and have read and understood the Privacy Policy