Sydney — The National Australia Bank has forecast thermal coal spot prices to average $98/mt FOB Newcastle basis 6,000 kcal/kg NAR in 2018, up by 12% from last year, it said Thursday in its Minerals and Energy Outlook.
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"Coal spot prices have been highly volatile in recent years, with an upward trend since recent lows in April 2018," it said. Thermal coal prices pushed above $110/mt to the highest level since early 2012, it added.
"Spot prices for thermal coal may become increasingly important -- given the breakdown of the traditional Japanese financial year contract mechanism, with Tohoku Electric Power Co. pulling out of negotiations with miner Glencore," it said.
The report noted that for the first five months of the year, China's thermal coal imports have risen 20% year on year to 97.4 million mt, driven by a particularly cold winter boosting demand across January through March, while it has had low availability of natural gas.
For the January-March quarter next year, NAB forecasts thermal coal spot prices to average $93/mt, before falling to $85/mt in April-June, $80/mt in July-September and then to $75/mt in October-December.
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