Coking coal prices may fall 4-16%
Latest forecasts indicate a 4 to 16 percent drop in coking coal prices in 2006 due to a rise in supplies and decrease in steel production growth. A recent survey carried out by Bloomberg claims that 2006 contract prices of coking coal may fall to $120/mt (around 4 percent less year on year) from April 1, 2006, as a result of the coking coal negotiations. Meanwhile, the Australian Coal Forecasting Conference forecasts contract price cuts of around 16 percent following the 120 percent increase in 2005. BHP Billiton and Fording Canadian Coal Trust's Elk Valley Coal Partnership are expected to begin separate negotiations with Japanese steelmakers this week. According to the Australian Coal Forecasting Conference, Australian hard coking coal exports increased 10 percent year on year to 80.62 million metric tons in 2005. At the same time, Canadian coking coal exports increased 12 percent year on year to 26.98 million metric tons. All forecasts agree that coking coal contract prices will neither rise above $125/mt in 2006, nor fall below $100/mt. Please also see Projections on new coking coal contract negotiations .