Metallurgical coal prices likely at bottom, modest recovery expected – Moody’s

11th July 2014

By: Leandi Kolver

Creamer Media Deputy Editor


Font size: - +

JOHANNESBURG ( – The metallurgical coal benchmark price remained at $120/t for the third quarter of the year, indicating that pricing was at or near a bottom; however, a modest recovery to $140/t was expected by the end of 2015, Moody’s Investor Service said on Friday.

The key drivers for the recent price collapse were the drop in Chinese imports, coupled with a ramp-up in Australian production and the downshifting of the global cost curve, Moody's stated, adding that additional global supply would keep prices at these low levels for the next few years.

The agency noted that, at these prices, all Moody’s-rated US metallurgical coal producers would continue to be stressed, with those that acquired metallurgical coal assets at the height of the market labouring under high leverage.

“Current prices mean most domestic production must operate at a loss. We believe this pricing environment also leaves as much as half of global met coal production underwater, including as many as a quarter of producers in Queensland, Australia,” Moody's VP senior analyst Anna Zubets-Anderson said.

Moody’s added that, while the current prices were unsustainable in the long run, take-or-pay transportation contracts in Australia, which required producers to pay for transport whether or not they use it, had limited the response from suppliers.

“The contracts will continue to contribute to the softness in prices,” Moody's said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



Sandvik load image
Sandvik Mining and Rock Solutions

As a world-leading mining equipment manufacturer, we are committed to improving your productivity and profitability. Sandvik Mining and Rock...


Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...


Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.064 0.1s - 90pq - 2rq
Subscribe Now