Coking coal prices will stay high
By Purchasing Staff -- Purchasing, 10/3/2005 6:00:00 AM
Coking coal prices are forecast to remain at high levels until the end of 2006—but increasing supply from Australia has caused Citigroup Smith Barney analysts to predict a rollover of the current contract price of $125 per metric ton. Previously, these analysts had forecast a rise to $135 for 2006 deliveries.
Supply of merchant coking coal was tight in 2004, boosting the price by 119% on 2005 supply contracts. But, in a new research note, the Citigroup Smith Barney analysts report a surge in bituminous coking coal supply this year from Australia. Some commodity analysts suggest Australia's ability to supply more coking coal shipments is being hampered by capacity at some export port terminals. But the Citigroup Smith Barney analysts note the Australian miners are overcoming the infrastructure constraints by exporting coking coal at the expense of lower-priced thermal coal used to fuel factory boilers and power plants.
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