Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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November 2019 | Steel Raw Materials


Downside risks come into focus: Coking Coal and Coke Market Analysis


Market participants should be aware that the Chinese authorities have the means to enact market controls should coal prices detract from their ‘reasonable range’.

Many steel producers are producing at or below cost, trapping steelmaking raw material prices. Although hot-rolled coil margins (finished steel prices minus iron ore, coking coal and other costs) recovered in September, they are noted to have deteriorated rapidly in October. Moreover, on a year-to-date basis, the spot price of hot-rolled coil is down by around 15% from the corresponding period of 2018, against coking coal which has declined at a slower rate of 8.4% during the same period. Given this margin compression we expect the next coking...

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