Coking coal price rally to subside in 2017

03 October 2016

Coking coal’s supply-driven price rally will likely abate by mid-2017 as production issues and transport hurdles in Australia and China ease, Citi Research analysts said.

“Short-term supply disruptions in China have been resolved and in Australia should be back to normal in the short term,” Citi analysts said Thursday in a note, adding: “Mine-specific incidents in Australia are expected to be fully resolved by early next year”.

In July, heavy rain and railway outages disrupted coal production and transport in Shanxi, China’s biggest met coal-producing region and, as a result, coastal steel plants became active in the spot market.

Meanwhile, Australian supply was affected by Glencore railway shutdowns as well as mine-specific issues at Anglo, South 32 mines.