April 2022
The Russia-Ukraine conflict is fuelling higher commodity prices, on the back of a tight market in Europe and Australia is expected to reap the benefits, with a massive surge in earnings from natural resources

In the June quarter of 2022, AME expects the premium HCC spot price to be US$360/t, the semi-soft coking coal price to be US$260/t, and the LVPCI price to be US$280/t.

Forecast for metallurgical coal consumption is expected to increase in the next two years due to the sustained increase in global steel market production and demand. AME expects the traded metallurgical coal consumption will increase up to 400Mt by 2024 from 338Mt in 2021. This represents an increase around 18.3% compared with the previous year. Australian exports are nevertheless forecast to rise to 198Mt in 2023 from 171Mt in 2021. By 2023, AME expects that the premium HCC spot price will be US$230/t, the semisoft coking coal price will be US$155/t, and the LVPCI spot price will be US$170/t.

The spot market for metallurgical coal in the Asian region reached its highest in late March. The export price of premium hard coking coal produced in Australia was US$670/t. High prices have been fuelled by Western sanctions on major metallurgical coal producer Russia, coupled with heavy rains and flooding, which have attacked the east coast of Australia over the last month.

The poor weather conditions are expected to end shortly in Australia. Once this happens, exports from Australia will recover and the current tight supply will be gradually relieved. The premium HCC FOB Australia price averaged US$594/t, significantly up from US$445/t the month prior. Similarly, the standard HCC price climbed to US$561/t from US$398/t in the previous month; LVPCI averaged US$541/t, up from US$324/t; and semi-soft considerably increased to US$469/t from US$307/t.

The US exported 2.7Mt of metallurgical coal in January, down by 9.5% from the same month last year. Of the total, 0.3Mt was shipped to China, which comprised around 10.0% of the country's total export volume in the first month of 2022.The US exported 10.7Mt of metallurgical coal to China in 2021, which was up by 9.1Mt compared to 2020. US low volatile HCC average price significantly increased to US$509/t from US$364/t (up by 39.8%) and the High Volatile A spot average price increased to US$485/t from US$388/t (up by 25.0%) in March.

China’s metallurgical coal imports totalled 8.5Mt in January and February 2022, marking an increase of 2.2Mt, or 33.8%, from a year earlier, according to customs data. From the total imported volume of metallurgical coal, around 2.2Mt was imported from US, 1.9Mt from Russia, 1.7Mt from Australia, 1.1Mt from Mongolia and 1.1Mt from Canada. China’s premium HCC price went up in March, averaging at US$435/t, up from US$411/t in February. Similarly, the CFR China standard HCC at US$404/t, up from US$373/t in the previous month.