Coking coal miners tipped to earn 63% more in 2017
COKING coal mining companies are expected to earn about 63% more for their coal this year than last, on the back of continued demand from key markets like India.
While some companies locked in a benchmark contract of US$285 a tonne for the March quarter - the highest since December 2011 - a report from the Office of the Chief Economist Mark Cully indicates the average benchmark price will climb in 2017, as spot prices level out throughout the year.
According to Mr Cully's report, demand from major export market China is expected to ease and prices decline after its relaxation of domestic supply-side policy measures.
But other factors, unique to each market, are expected to see the Australian benchmark metallurgical coal contract price to average US$186 a tonne in 2017, a 63% increase from the 2016 average of US$114 a tonne.
Last year: Imported 3,771,923 tonnes from Hay Point Coal Terminal and Dalrymple Bay Coal Terminal in December 2016, 3,532,964 in November 2016 and 2,398,677 in October 2016.
Outlook: Imports expected to decline 11% in 2017, and a further 3.9% in 2018, following lower demand from China's steel sector.
Last year: Imported 2,435,752 tonnes from Hay Point Coal Terminal and Dalrymple Bay Coal Terminal Bay in December 2016, 1,693,566 in November 2016 and 1,828,578 in October 2016.
Outlook: Imports are expected to stay the same through until 2018, as steel production remains constant.
Last year: Imported 1,806,607 tonnes from Hay Point Coal Terminal and Dalrymple Bay Coal Terminal in December 2016, 1,044,378 in November 2016 and 1,302,122 in October 2016.
Outlook: Exports to Korea are expected to remain unchanged.
Last year: Imported 1,683,263 tonnes from Hay Point Coal Terminal and Dalrymple Bay Coal Terminal in December 2016, 2,151,757 in November 2016 and 2,305,202 in October 2016.
Outlook: India is expected to import 12% more coal in 2017, and 3.6% more again in 2018. This is expected to be underpinned by it's increased steel production, as the Indian government aims to attract more investment to the country and improve it's manufacturing industry.
Top 10 export markets December 2016:
In tonnes, from Hay Point Coal Terminal and Dalrymple Bay Coal Terminal:
- China: 3,771,923
- Japan: 2,435,752
- Korea: 1,806,607
- India: 1,683,263
- Netherlands: 695,481
- France: 583,663
- Taiwan: 429,679
- Brazil: 366,881
- Vietnam: 142,882
- Turkey: 80,100