2012 REVIEW: Coking coal supply catches up with demand

The global coking coal market saw a steep dive in prices in 2012, on high supply and shrinking demand.

The benchmark price plunged to $170 per tonne fob Australia in the fourth quarter compared with the $235 per tonne agreed for the first quarter of the year.
Spot prices for premium hard coking coal also plummeted by almost 40% to $140 per tonne fob Australia in September, from a high of $226.50 per tonne in June, according to energy pricing agency Platts.
“I think this year was really a supply story in terms of what happened to [coking coal] prices,” Cliff Smee, senior commodity analyst at AME Group, said.
According to RBC Capital Markets’ estimate, 2012 is expected to see 270 million tonnes of supply in metallurgical coal, while the demand is forecast to stand at 272 million tonnes.
In 2011, the figures were 240 million tonnes and 250 million tonnes respectively.

“The market has been almost continuously supply-constrained [for many years], except for the global financial crisis,...

Published

Daisy Tseng

December 31, 2012

15:20 GMT

Singapore