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Goldman Cuts Coal Forecast as Indian Demand Seen Following China

  • Trends in China, India `main downside risks' to outlook
  • Bank trims 2016 Newcastle price estimate 17% to $54 a ton

The shrinking need for imports by two of the world’s largest coal consumers is undermining the fuel’s outlook, according to Goldman Sachs Group Inc., which cut price forecasts through 2018.

Imports by India, which overtook China as the main driver of seaborne thermal coal demand, may slow as the country increases domestic production, analysts including New York-based Christian Lelong wrote in a Sept. 22 report. Prices will also be pressured by a 30 percent drop in marginal production costs over two years through 2016, according to the note. The bank cut its price forecast for Newcastle coal, a benchmark in Asia, by 17 percent to $54 a metric ton for next year.