Australia does not expect a tightening of metallurgical coal market conditions until 2017 when more high-cost capacity is closed and import demand begins to recover, according to a report by the Australian Government Department of Industry and Science. In 2016, high-quality metallurgical coal prices are forecast to decline by six percent to average $97/mt.
Lower coking coal prices have forced the closure of mine capacity and reduced the incentive to invest in new supply, particularly greenfield projects. As a result, growth in exports is likely to come from existing producers. Most of the growth in world metallurgical coal exports is expected to come from Australia. Australia’s coking coal exports are projected to increase at an average annual rate of 2.5 percent to 213 million mt in 2020.