Global Metallurgical Coal Long-Term Outlook H2 2017: A China Story Through Early 2020S, Then India

  • ID: 4542532
  • Report
  • Region: Global, China, India
  • Wood Mackenzie
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Most metallurgical coal producers have recently benefitted from high prices. Now, China has imposed industrial restrictions for their winter season, which should lower import demand in the near-term. However, China is likely to support domestic prices for a few years, which will also help seaborne coals. Demand will stagnate until India growth takes off after 2025.
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  • Executive summary
  • Prices
2.17 an exception or the new normal?
  • Mid-term story dominated by flat demand and China influence
  • Mid-term prices still find support
  • Long term picture: greater call for new supply as India grows
  • Demand
  • China's import needs defy declining trend in BOF steel production
  • India falling short, but change is on the way
  • Traditional demand centres a drag on long-term growth
  • Supply
  • Usual suspects to benefit from expansion of the trade
  • Costs: Replacement supply comes at a cost, keeping prices higher in the long term
  • Scenarios and sensitivities
  • High and Low price banding
  • Risks and uncertainties
  • Decarbonisation
  • Maturing Chinese steel and mining policy might act to lower prices in the long term
  • Indian growth rate a challenge to predict
  • Chinese HCC reserve depletion could surprise in the out years
  • Alternate Iron production processes
Tables and charts
This report includes 3 images and tables including:

Images
  • High low contract price ranges: FOB Queensland HCC
  • Seaborne export supply change 2017 versus 2016
  • Change in seaborne exported metallurgical coal supply costs (nominal)
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