Citi cuts thermal coal price estimates as supply zooms

Weak demand in Europe and China to hit prices

Coal prices are likely to fall this year, owing to low demand and increased supplies. has lowered the price estimates of global for this year and the next, citing increased supply and subdued demand in India and China, the key nations.

Citi's commodity research team cut its coal price forecasts for 2013 and 2014 by six per cent and 15 per cent to $89 a tonne and $94 a tonne, respectively. Earlier, the price was estimated at $95 a tonne for 2013 and $111 a tonne for 2014. Citi said the subdued demand in the European and Chinese markets, along with oversupply of 31-41 million tonnes (mt) in 2013-14, would reduce prices further.

Chronic oversupply
"The market is being tested to the downside and the market appears to be in chronic oversupply. Supplier discipline is required to restore the market balance, which is not forthcoming," said a report.

India, China and Europe are the key drivers for coal prices. Last year, imports from Europe, China and India rose. But this year, the sluggish pace of economic growth in China and the lower-than-expected demand from Europe is likely to hit coal demand. However, India is likely to remain an importer of coal, accounting for about 25 per cent of the total exports from Indonesia.

"China remains the price-setter for prices, in our view," the report said.

Coal exports from Indonesia to China and India stand at 13-14 mt and eight to nine mt a month, respectively. Citi estimates 31-41 mt of oversupply in 2013-14.

image
Business Standard
177 22
Business Standard

Citi cuts thermal coal price estimates as supply zooms

Weak demand in Europe and China to hit prices

Rutam Vora  |  Vadodara 



Coal prices are likely to fall this year, owing to low demand and increased supplies. has lowered the price estimates of global for this year and the next, citing increased supply and subdued demand in India and China, the key nations.

Citi's commodity research team cut its coal price forecasts for 2013 and 2014 by six per cent and 15 per cent to $89 a tonne and $94 a tonne, respectively. Earlier, the price was estimated at $95 a tonne for 2013 and $111 a tonne for 2014. Citi said the subdued demand in the European and Chinese markets, along with oversupply of 31-41 million tonnes (mt) in 2013-14, would reduce prices further.



Chronic oversupply
"The market is being tested to the downside and the market appears to be in chronic oversupply. Supplier discipline is required to restore the market balance, which is not forthcoming," said a report.

India, China and Europe are the key drivers for coal prices. Last year, imports from Europe, China and India rose. But this year, the sluggish pace of economic growth in China and the lower-than-expected demand from Europe is likely to hit coal demand. However, India is likely to remain an importer of coal, accounting for about 25 per cent of the total exports from Indonesia.

"China remains the price-setter for prices, in our view," the report said.

Coal exports from Indonesia to China and India stand at 13-14 mt and eight to nine mt a month, respectively. Citi estimates 31-41 mt of oversupply in 2013-14.

RECOMMENDED FOR YOU

Citi cuts thermal coal price estimates as supply zooms

Weak demand in Europe and China to hit prices

Weak demand in Europe and China to hit prices Coal prices are likely to fall this year, owing to low demand and increased supplies. has lowered the price estimates of global for this year and the next, citing increased supply and subdued demand in India and China, the key nations.

Citi's commodity research team cut its coal price forecasts for 2013 and 2014 by six per cent and 15 per cent to $89 a tonne and $94 a tonne, respectively. Earlier, the price was estimated at $95 a tonne for 2013 and $111 a tonne for 2014. Citi said the subdued demand in the European and Chinese markets, along with oversupply of 31-41 million tonnes (mt) in 2013-14, would reduce prices further.

Chronic oversupply
"The market is being tested to the downside and the market appears to be in chronic oversupply. Supplier discipline is required to restore the market balance, which is not forthcoming," said a report.

India, China and Europe are the key drivers for coal prices. Last year, imports from Europe, China and India rose. But this year, the sluggish pace of economic growth in China and the lower-than-expected demand from Europe is likely to hit coal demand. However, India is likely to remain an importer of coal, accounting for about 25 per cent of the total exports from Indonesia.

"China remains the price-setter for prices, in our view," the report said.

Coal exports from Indonesia to China and India stand at 13-14 mt and eight to nine mt a month, respectively. Citi estimates 31-41 mt of oversupply in 2013-14.
image
Business Standard
177 22

LIVE MARKET

BSE

  ( %)

NSE

  ( %)

More News

  • Zee investors could score big from sports exit Zee investors could score big from sports exit
  • Disseminate prices via SMS, Sebi tells commodity bourses Disseminate prices via SMS, Sebi tells commodity bourses

STOCK WATCH

Company Price() Chg(%)
H T Media 88.30 12.41
Dr Lal Pathlabs 1004.05 8.85
G M D C 98.15 8.27
Oriental Bank 124.05 7.82
Yamini Invest 39.70 7.30
> More on BSE Gainers
Company Price() Chg(%)
Oriental Bank 124.00 7.92
G M D C 97.85 7.88
Jubilant Life 543.80 6.81
Radico Khaitan 103.05 6.73
Allahabad Bank 84.00 6.67
> More on NSE Gainers
Company Price() Chg(%)
R C F 47.10 -5.23
Welspun India 46.75 -4.10
Den Networks 80.90 -3.86
Trident 56.00 -3.45
Bharti Airtel 332.10 -2.82
> More on BSE Gainers
Company Price() Chg(%)
R C F 47.15 -5.23
Den Networks 80.90 -3.75
Welspun India 46.65 -3.72
Trident 55.90 -3.70
Whirlpool India 924.95 -3.16
> More on NSE Gainers
Widgets Magazine
Widgets Magazine
Widgets Magazine

Derivatives

Index
Instrument Type
Expiry Date
Option Type
Strike Price

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard