International credit rating agency Moody’s Investors Services has announced that it has raised its near-term price assumptions for metals and mining commodity prices, due to tight supply. The agency has increased its coking coal price assumptions to $275/mt for the next 12 months. The revision reflects the effects of the war between Russia and Ukraine and higher prices amid the ban on Russian coal imports into the EU. The prices were already high even before the war given the supply issues resulting from the bad weather conditions in Australia and Canada, SteelOrbis understands.
With the tight supply coming from Russia, the agency assumes that the prices will remain high even after the recovery of supply in Australia and Canada.
According to Moody’s, Australian producers will take advantage of the higher prices and limited coking coal supply, though the continuation of the war in Ukraine will reduce industrial activities and steel demand and will consequently limit further hikes in prices.
In addition, Moody’s expects that the G20 economies will expand by 3.6 percent this year and by three percent in 2023.