January 2012 | Steel Raw Materials
Pricing slips for lower quality coals: Coke and Coking Coal Highlights
Global steel production will be on par to slightly higher this year, as EU mills report output reductions and US mills struggle to raise production over 75-77% capacity.
With few transactions taking place in coking coal over the past week or two, prices for hard coking coal are essentially unchanged at around $235/tonne FOB Australia. We continue to hear rumblings that prices are poised to fall once the Asian markets pick up again. For now, however, we are already hearing that sales of lower quality coals are settling about $20-40/tonne lower than late that year. Some mid-vol. coals are now selling around $160-180/tonne FOB, down from around $200/tonne FOB late last year. This decline in the lower-quality coals likely is in line with high stocks of the material, as well as falling natural gas prices. Natural gas and thermal coal are both used heavily in energy generation and changes in the price premium of gas to coal, generators will use more natural gas in their peaking...
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