Coal news and updates

China's 2022 met coal prices seen bearish, demand to dip on year: sources

China's metallurgical coal prices are expected to remain bearish in 2022, with demand falling 2.9% below 2021 levels, industry sources said Dec. 30.

Guangdong-based Hongyuan Futures said China's 2022 average met coal prices are expected to dip below Yuan 2,000/mt ($314/mt).

In the early part of 2022, prices will likely remain soft mainly because of the Winter Olympics that starts in February, while prices will continue to be volatile ahead of two important national meetings occurring in the year, according to Hongyuan Futures.

China will hold its most important event of the year, the 20th National Congress, in November, but the National People's Congress will meet in March to discuss progress on key themes, including national economic development.

Price volatility is likely throughout the year amid fluctuating demand from the infrastructure sector, which could be impacted by the steel industry's production cap measures, according to Hongyuan Futures.

Guotai Junan Futures sees 2022 domestic coking coal futures prices moving in the range of Yuan 1,200-2,200/mt, and added that met coal demand would not rise much in 2022 on a potential output cap in China's crude steel sector.

The lower demand forecast is based on China Iron & Steel Industry Association's expectations of a 2.2% year-on-year dip in 2022 crude steel output, reaching 1.017 billion mt, and the resulting 4.5% year-on-year fall in 2022 pig iron output to 824 million mt.

China's coking sector is forecast to consume around 560 million mt of met coal in 2022, which translates to 1.01 billion mt raw coal, down 2.9% from 2021, data by Hongyuan showed.

China's met coal output could reach 489 million mt in 2022, steady from 2021 levels, latest estimates by investment bank China International Capital Corp., or CICC, showed.

For 2022, other industry analysts also see limited growth in domestic met coal production on possible output cap during H2 2022.

Hunan-based Goldtrust Futures said it expects China's met coal output to be around 500 million mt in 2022.