first_imgWood Mackenzie: Met coal prices likely to fall in 2019, steam coal outlook remains ‘challenging’ FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):The “sky-high metallurgical and steel prices” of 2018 will be rebalanced in the coming year, while the market for thermal coal is expected to continue on an uncertain and volatile course, according to Wood Mackenzie’s 2019 coal outlook distributed Jan. 22.The global economy is slowing after a strong 2018, Wood Mackenzie warns, with hints of weakening global trade and a manufacturing slowdown in the U.S., Europe and China. Metallurgical markets could be heavily impacted if a cyclical downswing is driven further into a recession by concerns about political uncertainty.The degree to which tighter steel margins impact metallurgical coal producers and cokemakers in 2019 may still largely be in the hands of China. The country’s direct intervention in the supply of coke and metallurgical coal is a dominant force in global pricing. “The Chinese coke industry has come under severe pressure since the release of a new reform program in July 2018, demanding the elimination of excess coke capacity and improvements to pollutant emissions,” the outlook states. “We expect the focus on capacity removal to harden in 2019 and think structural changes in the coke sector will become more visible.”The uncertain future of long-term thermal coal demand is compounding a reluctance to invest in new greenfield coal mines, according to the report. In addition to restrictive permitting and operating regulations, coal plant owners and coal mine operators are faced with banks and insurance companies that are under pressure to halt their support for coal-related projects in favor of renewable ones.“Volatility is defined as the liability to change rapidly and unpredictably. We expect the entirety of the thermal coal commodity life-cycle in 2019 to live up to this definition,” Wood Mackenzie’s outlook states. “From mine shovel to electron, coal faces another challenging year globally.”Similar to the markets for steelmaking coal, thermal coal markets could be easily swayed by the interventions of China. Wood Mackenzie is projecting total Chinese imports in 2019 to be 186 million tonnes, a drop of 6 million tonnes from 2018. “With a better supply outlook, it only takes a slight decrease in demand — from things such as fallout from the U.S.-China trade war, milder weather, environmental restrictions and better gas availability — to depress domestic pricing and trigger a government response in the form of further import restrictions,” Wood Mackenzie added.More ($): Wood Mackenzie: 2019 bringing rebalance to met coal, roller coaster for thermallast_img read more