Coal news and updates

Met coal prices seen steady at record low into 2016

Asian buyers will probably pay $89/t for hard coking coal, used to make steel, in the three-month period starting January 1, according to the median estimate of nine analysts surveyed by Bloomberg.

That matches the price for this quarter, which is at a record low for quarterly prices and the smallest for any long-term contract since at least 2004, when deals were agreed on a yearly basis.

The pain may not let up next year for metallurgical coal producers from Australia to the US as quarterly contract prices are forecast to remain at a record low amid slowing Chinese demand.

Coal prices have suffered along with other raw materials while demand from China weakens as its economy shifts away from heavy investment and grows at the slowest pace in a generation. Producers from Teck Resources to Vale have cut output and shut mines as metallurgical prices slumped.

"Demand growth has been moderating for most of the past two years as China withdraws," said Daniel Morgan, an analyst at UBS Group in Sydney. "Much of the met coal industry is loss-making and some of the market leaders are only breaking even."

Australia, the world's biggest shipper of coking coal, has sustained output despite the price slide, with exports during the first nine months of this year marginally higher than the same period in 2014, government data shows.

Australia exported 139.2 million tonnes of metallurgical coal during the nine months through September, compared with 137.1 million during the same period last year, according to data from the Australian Bureau of Statistics. Producers have cut 34 million tonnes from the market, equivalent to about 12% of last year's seaborne supply, Royal Bank of Canada estimates.

Chinese imports slipped 17% to 62.4 million tonnes in 2014, from a peak 75.4 million in 2013, according to estimates from Morgan Stanley. The bank predicts they will fall further this year to 48.7 million.

Alpha Natural Resources and Walter Energy, both US metallurgical coal producers, sought bankruptcy protection this year. The price forecasts for the first quarter in the Bloomberg survey ranged from $85/t to $95/t.

source: http://en.sxcoal.com