Analysts See Coking Coal Prices Down 4% In 2006

Edited from Purchasing.com

Analysts say they expect coking coal prices to be cut about 4% to $120/metric ton in the 2006 fiscal year starting in April due to anticipated increases  in supply and cutbacks in world steel production. Coking prices are currently $125.

World coking coal shipments have risen from 208.3 million tons in fiscal 2004 to an expected 215.8 million metric tons in fiscal 2005, according to the Australian Bureau of Agricultural and Resource Economics, which sees a 5.4% in 2006.

Benchmark coking prices are negotiated annually in talks between miners and steelmakers.

"Coking coal producers will have a hell of a fight on their hands trying to convince steelmakers they need to pay more in (fiscal) 2006," says Keith Williams, business director of resources with Wilson HTM Investment Group in Melbourne.