Coal Prices to Slide
Source: Reuters (11/27/08)
Prices of thermal and coking coal will fall 20 and 26 percent respectively in 2009, a Reuters poll showed on Thursday, thinning miners' profits as a slowing global economy chews into demand.
Prices of Asian thermal coal, mainly used to generate power, may fall to $100 a tonne in the 2009 Japanese fiscal year, down 20 percent from this year's agreed price of $125, a median forecast of 10 analysts said.
Prices of premium hard coking coal, used by steel makers, are forecast to slide 26 percent to $225 a tonne, after posting stellar gains of more than 200 percent to $305 a tonne in 2008.
But the broad range of estimates for coking coal, from $140 to $300 a tonne, shows how hard it is to gauge the impact of demand cuts by steel mills, which have reduced production as global financial woes bite.
"The spike in both thermal and coking coal markets has largely been triggered by supply disruptions earlier this year," said Gerard Burg, a commodities analyst at the National Bank of Australia.
"But weaker demand conditions and a possible increase in supplies will dampen prices in 2009."