Posted on 14 Apr 2023
With firmer steel demand and Chinese buying, Credit Suisse expects coking coal to remain firm at about $340/tonne on average across the year.
Australian met coal exports should climb to normal levels, but higher steel production ex-China should support prices, Kallanish learns from a Credit Suisse report.
Furthermore, demand should increase from China, which is buying Australian coking coal once more and is expected to produce less domestically.
The research house expects that higher global steel demand from a recovery in crude steel output outside China, together with greater demand from China, should lift global imports of met coal by 28 million tonnes this year.
It notes that total imports have been weak since 2020, when China banned Australian imports, restricted border crossings from Mongolia and lifted its reliance on domestic production, while depleting stockpiles.
“Now that it has returned to imports, we expect it to allow Shanxi production to subside, increasing the global import market size,” Credit Suisse says.
While export availability should rise from higher Australian and Mongolian exports, it expects the overall balance to remain tight, supporting prices.
It also notes the third successive La Nina event in Australia has ended and the Pacific has moved back to neutral conditions. This should mean less wet weather in eastern Australia in 2023, and potentially stronger exports.
Source:Kallanish
