The Australian Bureau of Resources and Energy Economics (BREE) has revised its forecast regarding Australia's metallurgical coal exports in the current year, raising the forecast growth rate to 2.9 percent from 2.4 percent and raising the export volume prediction to 175 million metric tons from 174 million metric tons, both compared to the previous forecast which was released in March this year. Also, in 2015 Australia's metallurgical coal exports are estimated to increase by a further five percent year on year to 183 million metric tons, supported by the completion of new capacities at several mines. Meanwhile, in the current year metallurgical coal exports from the US are forecast to decline by 4.6 percent year on year to 57 million metric tons, as the US is expected to use more coal in domestic production, supported by stronger steel production and demand from coal-fired power plants. Exports from the US are predicted to decline by a further 1.6 percent year on year to 56 million metric tons in 2015.
In 2014, Australia's exports of iron ore are forecast to increase by 17 percent year on year to 680 million metric tons, down from the earlier estimate of 687 million metric tons. The increase is expected to be supported by the expansions in production and infrastructure capacity in the Pilbara region that were completed in 2013 and early 2014. Meanwhile, in 2015 Australia's iron ore exports are expected to increase by 12.3 percent year on year to 764 million metric tons.
On the other hand, in 2014 Brazil's iron ore exports are predicted to increase by 9.4 percent year on year to total 361 million metric tons and to increase by a further 6.9 percent year on year in 2015 to 386 million metric tons. The growth in exports is expected to be sourced primarily from expansions and new projects over the medium term, mainly from Vale's 90 million metric ton annual capacity project.
In addition, iron ore spot prices (FOB Australia), which started the year at $122/mt, have steadily declined to around $82/mt in mid-June. Although steel production in China remains historically high, high iron ore port stocks and low steel prices have combined with a surge in the availability of supply coming from Australia to push prices down. For the whole of 2014, the iron ore spot price is forecast to average at $105.2/mt, down 16 percent compared to 2013 and down from the previous $110/mt estimate. In 2015, iron ore prices are forecast to decrease by 7.6 percent year on year to $96.5/mt, down from the previous $102.8/mt estimate.
On the other hand, in 2014 metallurgical coke prices (FOB Australia) are forecast to average at around $122.5/mt, down from the previous $127.5/mt estimate, while in 2015 metallurgical coke prices are forecast to decline by one percent year on year to $121.5/mt, down from the previous $137.3/mt estimate.