Coking coal prices will ease back in 2006
By Purchasing Staff -- Purchasing, 8/1/2005 6:00:00 AM
International prices for coking coal will fall in 2006 off the "unprecedented" level of $125/metric ton, according to AME Mineral Economics. In its latest report, the Australian commodity analyst says. The coal shortage of last year has now eased with an increase in exports from Australia, Canada and the U.S., as well as a jump in Chinese coke exports.
The average price rose by 119% this year for coking coal, the bituminous coal that is baked for use in smelting iron ore and scrap in blast furnaces into molten pig iron. Supply is better although AME believes the market still isn’t in balance. AME forecasts world demand for imported coking coal rising by 3.1% annually between 2004 and 2010.By next year, though, supply of premium quality hard coal should come closer to matching demand. That’s because this year’s increase in price has attracted new capacity investments in Australia and Canada. This may even result in the coking coal deficit evaporating sometime in 2007, even with the strong growth in global demand—especially in China and Brazil—that is predicted for the next few years.
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