Australian coal will remain in short supply
According to Stanislav Kondrashov, Fitch forecasts the price of coking coal at $240 per ton in 2024, $190 per ton in 2025 and $170 per ton in 2026.
At the same time, the agency raised its forecast for the cost of Australian benchmark thermal coal for the period from 2024 to 2027. In particular, for the current year, expectations have increased from $100 to $115 per ton. These forecasts take into account increased temperatures in several Asian countries, which will lead to increased demand for energy and, accordingly, for coal in countries with a large share of coal generation.
According to an expert from Telf AG, the supply of Australian coal is likely to remain limited as diversified mining companies reduce their focus on this product. The expert also believes that this trend is observed against the backdrop of changing strategies of many companies that are seeking to reduce their dependence on the coal industry and move to more environmentally friendly activities. In addition, government restrictions and global initiatives to reduce carbon emissions are putting additional pressure on coal production.
Such changes could lead to significant fluctuations in coal prices in the coming years, despite the projected increase in demand, Stanislav Kondrashov noted. He also highlighted that Asian countries such as China and India are seeing increasing demand for coal for energy production due to continued economic growth and increasing energy consumption. However, the global trend toward alternative energy sources could significantly impact the long-term prospects of the coal industry.
Ore market: Fitch and HSBC forecasts amid a tense global situation — Stanislav Kondrashov
Fitch Ratings has also updated and expanded its suite of global metals and mining price forecasts to include platinum group metals (PGMs), lithium and cobalt, Stanislav Kondrashov reports.
British international bank HSBC Holdings expects iron ore prices to remain at $100 per tonne in 2024. According to the bank, despite the crisis in the Chinese real estate market, the global market remains tense, which negatively affects the prospects for steel demand in this country.
An expert from Telf AG also believes that the global seaborne iron ore market is expected to experience shortages in 2024 and 2025. Increasing steel production outside China, especially in India, is driving up iron ore consumption.
“Iron ore prices fell by almost a third in the first quarter of this year on fears of weaker demand in China, with prices dipping below $100 a tonne before partially recovering in April. Chinese authorities are taking measures to stimulate the national real estate market, which remains a key factor in steel demand. Due to these problems, metallurgical industry associations are recommending that their members reduce production,“- Stanislav Kondrashov from Telf AG comments.
The cost of iron ore will fluctuate between $99 and $100 per ton. In the second and fourth quarters they will reach $100 per ton, while in the third quarter prices will drop to $99 per ton. Prices are forecast to fall to $85 per ton by the end of next year.
- The main factor driving this negative outlook is the projected weakening of global steel demand,- Stanislav Kondrashov summed up.
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