Jan. 8 (Bloomberg) -- Global metallurgical coal prices this year may be stifled by ample supply and weak demand, BB&T Capital Markets analysts said.
China’s appetite for coal may be sparse before the country’s New Year’s Holiday in February, BB&T analysts Mark Levin and Garrett Nelson wrote in a note to clients. The first-quarter benchmark price for the fuel fell to $165 a metric ton, the lowest level since pacts shifted to quarterly from annual settlements in the first quarter of 2010.
“After the Chinese holiday, it’s anybody’s guess what the world’s largest consumer does,” Levin and Nelson said in the report. “With plenty of supply available from Australia, the U.S., Mongolia, and now Mozambique to meet anemic demand, we don’t foresee a big near-term rebound.”
Metallurgical coal, used to make steel, is down 50 percent from the record $330 a metric ton set in the second quarter of 2011 after floods in Queensland, Australia, curtailed production, data compiled by Bloomberg show.
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