Steel Products Prices North America
Met Coal Prices: Supply Outpaces Demand
Written by Sandy Williams
March 11, 2014
Met coal prices are plummeting and oversupply is the problem, says Goldman Sachs. On Friday, Goldman cut its metallurgical coal average price estimate for 2014 to $141 per metric ton from $150 due to higher Australian output and slower demand from China along with “limited U.S. supply rationalization.”
Bank of America Merrill Lynch agrees that miners need to idle capacity to return to more normal pricing but global producers are unwilling to do so. BofAML says the “seven-year low met coal spot prices as reported by Platts reflects a deeply troubled market.”
As of Friday, March 7, Platts reported spot premium low-vol met coal prices FOB Australia were $113.25 per metric ton, down from $119.30 per metric ton the previous week.
Platts says coking coal prices have dropped nearly 30 percent over the past year. Normally, monsoon weather in Australia will slow down exports and push prices up, but the normal pattern hasn’t emerged so far this year.
“Everyone is pointing to potential reasons for the weaker prices, but it most likely comes down to supply-demand fundamentals,” said Platts in the latest issue of Steel Raw Materials Monthly. “The market for hard coking coal is oversupplied and demand is lackluster due to weak steel prices and production in China.”
At the Coaltrans USA Conference last month in Miami, conference participants concurred that global oversupply is a problem. Coltrans USA attendee Ernie Thrasher, CEO of Xcoal, a leading US met coal supplier, estimates that it may take two years to recover from lower revenues and supply rationalization.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products Prices North America
Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.
SMU Price Ranges: HR crawls back to $800/ton
SMU’s HR price stands at $800/st on average, up $5/st from last week. The modest gain came as the low end of our range firmed, and despite the high end of our range declining slightly.
SMU successfully completes IOSCO review
SMU has successfully completed an external review of all our prices. The review has concluded that they algin with principles set by the International Organization of Securities Commissions (IOSCO).
Domestic plate prices could heat up despite so-so demand, market sources say
Some sources also speculated that plate could see further price increases thanks to modest but steady demand, lower imports, mill maintenance outages, and end markets less immediately affected by tariff-related disruptions.
SMU Price Ranges: HR holds, galv slips amid competing market narratives
SMU’s sheet and plate prices see-sawed this week as hot-rolled (HR) coil prices held their ground while prices for galvanized product slipped.