Coking coal forecast cut as recovery lags
Australia cut its forecast for coking coal production in fiscal 2012 as recovery from natural disasters takes longer than expected but lifted its projection for iron ore production a touch. The world’s top coking coal and iron ore exporter lowered its forecast for the production of metallurgical coal, a key steelmaking material, by 6 percent to 161 million tonnes from its June forecast and cut its export forecast by 5 percent to 156 million tonnes.But output of iron ore, another key steelmaking ingredient, is seen at 470 million tonnes, 0.7 per cent above earlier forecasts, the Bureau of Resources and Energy Economics said in a quarterly report on Tuesday.
The cut in coking coal forecasts is unlikely to cause major market ripples after the central bank repeatedly warned the sector was recovering from early-2011 floods and cyclones slower than previously estimated.
Output of gold, the nation’s third-biggest export earner after iron ore and coal, remained unchanged at 277 tonnes.
The natural disasters contributed to the biggest slump in Australia’s GDP for 20 years in the first quarter and lowered coal production by about 25 million tonnes.
Recovery was seen by the second half of 2011 but the central bank now estimates full production would not resume until early 2012, also restraining Australia’s growth.
Still, export revenue from iron ore and coal jumped 42 percent to $101 billion in the year to June 30 as coking coal prices shot up to a record $US330 per tonne in the second quarter in response to production outages.
“The high-quality metallurgical coal contract prices for the December quarter 2011 are expected to settle at around $US285 a tonne, below the September quarter price of $315 a tonne…(and) in 2012, hard coking coal prices are assumed to average $US246 a tonne ,” the government agency said.
“The decline in price reflects slower import growth from key Asian importers combined with increased exports from Australia as production and exports recover from floods in early 2011,” it added.
However, weather related risks are once again increasing after the weather bureau said the La Nina weather phenomenon, the chief cause of the floods, may develop again, albeit in a weaker form than last time.
Any weather-related disruption could impact global prices as Australia accounts for about 40 percent of global iron ore trade and around 60 percent of metallurgical coal exports with China and India ready to soak up virtually whatever the country can produce.
Indeed, Chinese iron ore imports in August jumped 33 per cent from a year earlier and coking coal imports in July rose 29 percent as the country’s steel industry roars ahead, despite economic weakness in Europe and the United States.
With Australia supplying around 40 percent of China’s iron ore and a fifth of its coking coal, it generated a massive $24 billion trade surplus with its biggest trading partner in fiscal 2011.
And the future for Australia’s mining sector appears bright.
The country is enjoying a once in a 150-year mining boom and a record $430 billion in resources investment is either underway or on the drawing board as the country supplies Asia’s rapidly industrialising economies with raw materials.
In fact, the resource sector is expanding so fast policy makers have expressed concern that capacity constraints will prevent all investment plans from being realised and some projects could get cancelled or delayed.
The cut in coking coal forecasts is unlikely to cause major market ripples after the central bank repeatedly warned the sector was recovering from early-2011 floods and cyclones slower than previously estimated.
Output of gold, the nation’s third-biggest export earner after iron ore and coal, remained unchanged at 277 tonnes.
The natural disasters contributed to the biggest slump in Australia’s GDP for 20 years in the first quarter and lowered coal production by about 25 million tonnes.
Recovery was seen by the second half of 2011 but the central bank now estimates full production would not resume until early 2012, also restraining Australia’s growth.
Still, export revenue from iron ore and coal jumped 42 percent to $101 billion in the year to June 30 as coking coal prices shot up to a record $US330 per tonne in the second quarter in response to production outages.
“The high-quality metallurgical coal contract prices for the December quarter 2011 are expected to settle at around $US285 a tonne, below the September quarter price of $315 a tonne…(and) in 2012, hard coking coal prices are assumed to average $US246 a tonne ,” the government agency said.
“The decline in price reflects slower import growth from key Asian importers combined with increased exports from Australia as production and exports recover from floods in early 2011,” it added.
However, weather related risks are once again increasing after the weather bureau said the La Nina weather phenomenon, the chief cause of the floods, may develop again, albeit in a weaker form than last time.
Any weather-related disruption could impact global prices as Australia accounts for about 40 percent of global iron ore trade and around 60 percent of metallurgical coal exports with China and India ready to soak up virtually whatever the country can produce.
Indeed, Chinese iron ore imports in August jumped 33 per cent from a year earlier and coking coal imports in July rose 29 percent as the country’s steel industry roars ahead, despite economic weakness in Europe and the United States.
With Australia supplying around 40 percent of China’s iron ore and a fifth of its coking coal, it generated a massive $24 billion trade surplus with its biggest trading partner in fiscal 2011.
And the future for Australia’s mining sector appears bright.
The country is enjoying a once in a 150-year mining boom and a record $430 billion in resources investment is either underway or on the drawing board as the country supplies Asia’s rapidly industrialising economies with raw materials.
In fact, the resource sector is expanding so fast policy makers have expressed concern that capacity constraints will prevent all investment plans from being realised and some projects could get cancelled or delayed.
Comments
Post a Comment