Thermal coal price expected to stay high
By Purchasing Staff -- Purchasing, 9/12/2005 6:00:00 AM
The Global Currency and Commodity Research team at J.P. Morgan Securities recently revised expectations for thermal coal prices by forecasting April 2006 contract prices (Japan benchmark) will hold at $54 a metric ton.
Earlier thermal coal expectations had been a 7% decline in prices when 2006 contracts are signed. In truth, world spot prices could face downward pressure in the next two quarters if manufacturing activity—and, thus, electricity use and coal demand—continue to decline in Europe and go into a slide in the U.S., China, Asia and India. But, J.P. Morgan analyst Anindya Mohinta sees more positives than negatives ahead for coal demand worldwide. "We expect thermal coal prices to stabilize towards the latter half of the third quarter and rise in the run up to the April 2006 negotiations," he writes.
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