Coking coal on an upswing

摘要

Approximately 70 per cent of the world's steel production is dependant on metallurgical (met) coal, or coking coal. Its principal application is in the making of blast furnace coke through carbonisation. As its output and pricing structure mirrors that of steel demand, it has traditionally been viewed as a "poor cousin" to thermal coal, whose demand is easier to forecast. However, Australia's AME reported recently that global crude steel production this year is predicted to exceed lbt for the first time, which would hike internationally-traded met coal demand to record levels. After lean times, the met coal industry is facing a return to reasonable profitability on the back of higher prices and booming steel profits. The result, points out AME, is that US suppliers are once again entering the Pacific market, while new met coal export capacity, predominantly generated from new mines and brownfield expansions in Australia and Canada, is expected to "barely keep in step with incremental demand in 2005 and 2006."