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Analysts revise Q4 coal price outlook down 4%

Pacific basin benchmark Newcastle coal prices will likely average USD 79.30/t in the fourth quarter, down 4% – or USD 3.30 – from previous estimates, amid expectations of weaker demand, said economic analysis firm FocusEconomics.

Prices in 2020 would average 3% less than forecast last month, at USD 83/t, said the firm, whose assessment is based on an average of projections by 12 economic forecasters.

“Prices for Australian thermal coal jumped in early July before gradually falling amid weak demand from Asia and a push towards cleaner energy sources,” it said in a note.

The Global Coal Newcastle index has so far this year averaged USD 85.25/t, with a latest assessment at just USD 61.19/t.

Chinese demand
“Chinese demand remained subdued in recent weeks amid import policy uncertainty as the country reined in its import volumes,” it said.

“In addition, the mild summer weather and increased electricity delivery from within China have also reduced the need to import thermal coal, which is mainly used to generate energy.”

Nevertheless, China’s July imports still proved relatively strong, rising 13% on the year to 32.9m tonnes, customs data showed.

But analysts anticipate a sharp decline in the fourth quarter, as importers face the prospect of exhausting their import quotas from as early as September.

“The [coal] market remains under pressure from a global push away from polluting industries amid a focus on climate change,” FocusEconomics said.
Source: Montel

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