Global steam coal price forecast (December 2013)
Metal Expert Consulting continues to publish open quarterly reports to show its own understanding of the steam coal market development until 2015 and in a long term and compare it with the consensus forecast of investment companies and analysts.
Over the past three months, price for Australian steam coal (6,600 Kcal/Kg) has stopped decreasing and risen from $78/t to $85/t FOB Newcastle.
Metal Expert Consulting’s methodology of forecasting global steam coal prices is based on mixed forecasting methods and includes models of non-linear dynamics, demand and supply balance in the global coal market, and estimation of key suppliers’ costs. For more details on Metal Expert Consulting’s forecasting methods, as well as on investment forecasts for raw materials, see January report Global iron ore price forecast.
Below is the Metal Expert Consulting’s short- and medium-term consensus forecast of steam coal price changes based on 29 reports by industry and investment analysts. To get the forecasts, we have adjusted all available prices to a common benchmark basis – the FOB Australia price for 6,600 Kcal/Kg steam coal. The forecasts for November-December have been considered as well as some earlier forecasts of investment banks with high degree of accuracy for Q3-Q4.
Experts’ forecasts from the reports and researches carried out by the following companies have been taken into account (in alphabetic order): ABARE, ANZ, BREE, CIMB Group, Citigroup Inc., Commonwealth Bank, Credit Suisse, Deutsche Bank, Econ Intelligence Unit, Euromonitor International, Goldman Sachs, IMF, Investeс, Liberium Capital, Macquarie Bank, Merill Lynch, National Australia Bank, Numis, RBC Capital Markets, Renaissance Capital, Societe Generale, Standart Bank, TD Economics, UBS, VTB Capital, Westpac, Wilson HTM, World Bank.
Отметим, что около трети из перечисленных выше компаний не дают прогнозов цен на энергетический уголь в долгосрочной перспективе, поэтому консенсус-прогноз, максимальный и минимальный прогноз для этого периода рассчитаны на основе 13 показателей. Минимальный прогноз цен на уголь предлагают Numis и Citigroup Inc., максимальный – Morgan Stanley, Societe Generale и CIMB Group.
About a third of the above companies provide no long-term forecasts for steam coal prices, therefore the consensus forecast, the maximum and minimum forecasts for the period have been based on 13 indicators. The minimum coal price forecast is offered by Numis and Citigroup Inc., the maximum one – by Morgan Stanley, Societe Generale, and CIMB Group..
Global steam coal price forecasts by industry and financial companies, $/t
The use of our own forecasting methods keeps showing good results. The Q4 forecast we published in early October differs from actual price just by $2/t. Meanwhile, consensus forecast of investment companies has a greater inaccuracy of over 7% ($6/t).
Comparison of steam coal price forecast accuracy of MEC and industry analysts
The graph below shows comparison of Metal Expert Consulting’s export price forecast for Australian steam coal with the level of prices that investment and industry analysts expect (adjusted to the same basis).
Our expectations have not changed much as compared with the October forecast. According to Metal Expert Consulting’s estimates, the average steam coal price will be $82/t in H1 to increase to $85/t in Q3-4. The 2015 and long-term price forecast has stayed at the previous level. We also believe that in 2014 coal prices will reach their minimum.
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