Steel making Coking Coal prices will fall below $240/MT by the fourth quarter of 2012 as demand eases
and supply improves following flooding in Australia.
Coal prices have started to fall from the last quarter and will continue
to decline due to softening demand and the recovery of supply from flood-hit
basins earlier in the year.
Leading industrial indicators suggest a sharp
deterioration in manufacturing activity – reflected by the decline in global
steel production.
Contract coal prices settled at $285 a ton for the current quarter, 10
percent lower than the previous three months, and after reaching a record
following flooding at the start of the year in Australia, the world’s biggest
exporter.
The longer-term demand outlook remains strong, which will likely trigger
further takeover activity in the sector.
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