Global coking coal prices are expected to rise over the next few years at a more stable rate following a possible sharper price increase in third-quarter 2016 contracts, consultants Wood Mackenzie said Tuesday.
With spot prices now hitting around $100/mt FOB, participants should be expecting a sharp adjustment for the quarterly benchmark from the $84/mt agreed for Q2, Wood Mac's director for global met coal markets, Jim Truman, told the Eurocoke Summit in Barcelona.
After that, fundamentals indicate a more gradual price rise from a base of around $84/mt, he added.
"The fundamentals for next year are averaging out to a general rise going forward," Truman told delegates.
He saw good demand for US fluidity coals, while the end of significant mining cost improvements is adding to a floor. Average HCC costs globally may be $75/mt FOB, according to Wood Mac research. Wood Mac expects coke export prices in China to accelerate toward $194-$195/mt FOB, while coking coal prices rise quarter by quarter slowly from $84/mt FOB.
Exports of coke from China may stay stable around 10 million mt for 2016, analysts, including Truman, expect.
