By Stephen Nakrosis
Fitch Ratings on Monday said it was raising pricing assumptions for thermal and hard coking coals.
Thermal coal price assumptions
Fitch said it raised all thermal coal price assumptions on “falling production due to lower investments.” It added “lower investments in thermal coal mining mean gradually reducing production, which will mitigate the impact of shrinking demand and moderate the pace of the price decline.”
Fitch also said “we anticipate that the global seaborne market will shrink faster than the Chinese domestic market. Furthermore, increased coal production costs will support prices, particularly in Australia, where labor cost increases are particularly sticky due to a unionized workforce.”
Coking coal price assumptions
Coking coal assumptions have been increased for 2023-2024 to “reflect YTD prices and higher production costs,” Fitch said.
Fitch said increased production costs of hard coking coal have been reflected in its higher short-term assumptions.
“The assumptions also reflect seaborne supply disruptions due to adverse weather conditions, while demand from the steel industry, particularly in China, is likely to be sustained,” Fitch said.
Write to Stephen Nakrosis at [email protected]
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