International Coal Markets Outlook The end of the boom

www.woodmac.com International Coal Markets Outlook “The end of the boom” December 2008 Coal Trading Conference NYC Delivering commercial insight to ...
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International Coal Markets Outlook “The end of the boom” December 2008 Coal Trading Conference NYC

Delivering commercial insight to the global energy industry

www.woodmac.com

Agenda

1

Historic pricing

2

Price drivers for thermal and metallurgical coal

3

Supply demand outlook

4

Outlook for prices

2

Delivering commercial insight to the global energy industry

1

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Contract prices have risen dramatically across all coal types Historical Thermal and Metallurgical FOB Coal Prices

US$/t FOB (Nominal)

320

BHPB reported settlements with JSM’ JSM’s

Hard coking coal (HCC) Semi-soft coking coal (SSCC) Thermal coal (basis 6322kcal/kg gar)

280 240

Xstrata reported settlements with Chubu EPC

200 160 120 80 40 0 1982

1994

1988

1998

2002

2006

2008(p)

Source: Wood Mackenzie Coal Market Service – Thermal Trade 3

Delivering commercial insight to the global energy industry

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Historical CIF coal prices in Europe Europe Spot Market Index (CIF ARA) 160 140

Has the market peaked yet? Colombia South Africa

US$/t

120 100 80

Surge in Asian demand

Avg. ~$70

60

LT range 4Bt 2-4Bt 1-2Bt

500Mt-1000Mt 200-500Mt 100-200Mt

50-100Mt 10-50Mt