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Coking Coal Prices My Improve in 2020 – Citi

Coal News - Published on Fri, 13 Dec 2019

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Citi Research said that Australian coking coal spot prices are expected rise in 2020 on narrowing surplus in the seaborne market and strong demand from China for high grade coals. Citi Research said “We expect seaborne prices to rise in order to match Chinese domestic prices, on the back of accelerating Chinese imports on renewed 2020 import quotas. Furthermore, demand for high grade coking coal will continue to dominate. This is due to the domestic mines running low on their low sulfur reserves, and blending with higher sulfur coals to obtain an optimal sulfur content level. On the supply front, there should be limited addition of coking coal supply in the global markets. Total planned capacity additions between 2019 and 2022 are expected to be 32.4 million tonnes or 10% of the current seaborne and land borne coking coal supply. There might be risks of push-back in these supply projections due to uncertain price outlook and financing challenges.

Citi Research added “Other coking coal producing countries like Mozambique and Russia are expected to see modest increase in coking coal supply. However, Russia is expected to gain more market share in the Asia Pacific market amid persistent weakness in Europe. The emergence of Russian products in the Asia Pacific region has been prevalent in the second half of the year, especially in the pulverized coal injection segment, one of Russia's key coking coal exports.”

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Posted By : Rabi Wangkhem on Fri, 13 Dec 2019
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