Posted on 14 Dec 2023
Fitch Ratings has increased its coking coal price forecast but cut its nickel price projection, Kallanish notes.
The rating agency says coking coal assumptions for 2023-2024 have been hiked to reflect year-to-date prices and higher production costs.
The new price forecasts for coking coal stand at $290/tonne and $210/t for 2023 and 2024, respectively, up from previous forecasts of $250/t and $190/t. Meanwhile, price assumptions for 2025 and 2026 remain unchanged at $180/t and $170/t, respectively.
The higher forecast takes into account the increased production costs of hard coking coal, as well as seaborne supply disruptions due to adverse weather conditions. Demand from the steel industry, particularly in China, is meanwhile likely to be sustained.
Fitch, however, has reduced its 2024 nickel price assumption to $18,000/t from the previous forecast of $19,000/t due to an increased supply surplus.
The reduced 2024 nickel price assumption reflects weaker short-term market conditions, driven by lower demand from stainless steel production in China. This has created a significant market surplus, which it expects to remain due to a rise in Class 1 nickel output in 2024, putting pressure on prices in the short term.
The rating agency, however, maintained nickel price assumption for 2023 at $22,000/t. Nickel price forecasts for 2025 and 2026 also remain unchanged at $17,000/t and $15,000/t, respectively.
Source:Kallanish
