BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Coal

Newcastle thermal coal prices may drift lower in 2018: Citi

Oil

Washington state bill to limit vapor pressure for crude oil shipped by rail would have wide-ranging impacts

Coal

Platts Global Coal Alert

Renewables | Natural Gas | Fuel Oil | Utilities

Central American Energy Conference, 22nd Annual

Coal

Australian Aurizon's Jan-Mar coal railings rise 4% on year despite strikes, derailment

Newcastle thermal coal prices may drift lower in 2018: Citi

Singapore — Newcastle thermal coal prices are expected to drift lower for theremainder of 2018 as global supply firms and demand growth slows, Citianalysts said Monday.

Not registered?

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

Register Now

Citi forecast the price of Newcastle 6,300 kcal/kg GAR coal for thefourth quarter of this year to drop to $80/mt FOB from $103/mt in the firstquarter.

For 2019, Citi expects this price to be at $85/mt before dropping to$80/mt in 2020.

However, medium-term thermal coal prices will likely stay higher forlonger as the seaborne market is supported by a lack of investment in newsupply, the analysts said. Second-quarter 2018 Newcastle 6,300 kcal/kg GARprices are expected to be at $90/mt FOB.

"China should remain the bellwether of the seaborne thermal coal market,"the analysts said.

Chinese thermal coal demand has had a strong start to the year withthermal power generation up 8.7% year on year, the analysts said.

However, full-year growth could be much weaker, they added.

Strong demand from China and supply tightness at various coal-producingregions have led to a spike in thermal coal prices since the latter half of2016.

Chinese thermal coal supply has been hampered due to environmental andsafety crackdowns, railway transportation bottlenecks and strong demand forcoal during the colder-than-expected winter, boosting its domestic prices.

"Physical market tightness has eased since March [in China], withinventories building rapidly at utilities and ports," the analysts said."Domestic production has picked up and transportation bottlenecks areresolved."

The analysts said that they expect coal inventories in China to remainelevated and domestic coal prices to further weaken in the second quarter.

The domestic Chinese 5,500 kcal/kg NAR coal price had surged to a high ofYuan 770/mt FOB Qinhuangdao in February this year amid strong demand andsupply tightness. However, ever since the government's move to cap the pricerise and boost production, the prices have come down to be assessed at Yuan555/mt Friday, S&P Global Platts data showed.

The country's move to restrict low calorific value coal imports, andshipping disruptions due to Daqin railway maintenance could be some of thefactors impacting prices in the coming months, the analysts said.

Coal shipments from China's Daqin to Qinhuangdao railway are set to dropto lower levels when the rail corridor undergoes scheduled maintenance fromApril 7 to May 1.

"The Chinese thermal coal market must navigate through seasonal demandweakness and incremental supply growth in the following months," the analystssaid.

For the full year, the market should stay in a reasonably tight balanceas the Chinese government has limited the bandwidth to raise production andfix spot prices in the range of Yuan 500-570/mt FOB Qinhuangdao for 5,500kcal/kg NAR cargoes, they added.

WEAKENING INDIA, SHINING ASEAN

India's coal imports are expected to remain broadly flat year on year in2018 with rising demand being offset by domestic supply, Citi analysts said.

Coal India, which meets 84% of the country's coal requirements, istargeting to produce 1 billion mt by the end of this decade.

Coal shipments for fiscal year 2017-2018 stood at 580.28 million mt asagainst a target of 600 million mt but were up by 7% year on year.

"With improving production from Coal India, India's thermal coal importsshould moderate over the medium term, albeit at a slow pace," the analystssaid.

Indian thermal coal imports are expected to drop to 136 million mt in2020 from 149.3 million mt in 2017, Citi noted.

However, thermal coal demand in Southeast Asia is expected to riseconsistently in the next few years, they added.

Indonesia is planning to add 35 GW of additional generation capacities,with a series of new coal-fired power projects slated to be commissioned in2019, the analysts noted.

"Similarly, the commissioning of new coal-fired power plants shouldsupport thermal coal demand in Philippines, Vietnam, Malaysia and Thailand."

Indonesia's exports could rise to about 340.9 million mt in 2020 fromabout 318.3 million mt in 2017, as high thermal coal prices propel the restartof idled mines, the analysts said.

However, falling investments in capacity expansion globally should limitseaborne supply growth, they added.

--Deepak Kannan, deepak.kannan@spglobal.com

--Edited by Pankti Mehta, pankti.mehta@spglobal.com