2005 coking coal prices: Decks being cleared

摘要

Difficult to escape the excitement being generated by the upcoming 2005/06 price settlements. "What should set the price? The internal US market? Chinese coke prices as marginal tonnage? Ongoing loyalty to the interests of the consumer?" were the questions posed this week by one seasoned producer/trader. The bankers' analysts think they know the answer and it seems that this year more of them are putting in their pennyworth of views of the next 12 months. Generally they are incomprehensibly low although some of them - Jim Lennon from Macquarie and Chris Lancaster from RBC Capital Markets haven't revised their earlier numbers recently. The latest two banks to have popped their heads over the parapet do include very recent revisions. The most bullish currently is Goldman Sachs which plumps for a base case price of 80 dollars FOB for Australian hard coking coal (in comparison with their estimate for the current year of 57.50 dollars). At the same time it includes a one-year high priced scenario of 120 dollars for a one-year deal and a three-year agreement of 80 dollars. Meanwhile, Morgan Stanley also revises upwards its forecast, up from 64.60 dollars to 77.04 dollars, a 20 percent revision. (MS uses a different 2004/5 base - 59.26 dollars).