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NAB slashes thermal coal price forecasts on weaker demand outlook

The National Australia Bank has lowered its thermal coal price forecasts for 2020 and 2021 on a weaker demand outlook in the long term, NAB said Wednesday in its monthly Minerals and Energy Outlook.

While leaving its forecast for the current October-December quarter unchanged at $72/mt for the FOB Newcastle price basis 6,000 kcal/kg NAR, it cut longer-term prices, with the July-September period of next year taking the biggest hit — slashed by 13% to $68/mt.

The January-March and April-June quarters of 2020 were dropped by 3% and 8% to $72/mt and $70/mt, respectively, while October-December was slashed by 8% to $70/mt.

For 2021, NAB revised down the March quarter price estimate by 3% to $70/mt, while the following three quarters were dropped by 6%, 4% and 3%, respectively, all to $68/mt, it said.

“In the near term there is some upside potential for thermal coal demand — reflecting heating demand in the Northern Hemisphere winter — however, longer term demand prospects appear weaker (including in key import markets such as China and India),” NAB said.

“Current softness in spot prices highlights the downside risk to these forecasts,” it added.

The price of FOB Newcastle 6,300 kcal/kg GAR has slumped 34% so far this year, to be assessed at $66.40/mt Tuesday, S&P Global Platts data showed.

As recently as May, NAB had forecast prices for the start of next year to be as high as $93/mt.
Source: Platts

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