Decade-low global coking coal prices are sending a message to U.S. exporters: Keep your coal.
A 41 percent reduction in U.S. steelmaking coal exports over the past four years just isn’t deep enough to stem price declines, according to reports Thursday from Bloomberg Intelligence and Goldman Sachs. The New York-based investment bank slashed its 2016 forecast for benchmark coking coal by 11 percent to $75 per metric ton, citing American supply that the world doesn’t need.
Metallurgical coal, used to forge steel, is ensnared in a commodity rout that’s brutalized everything from crude oil to copper. Prices have plunged 75 percent from a record in 2011 as China’s appetite for foreign supply slowed. Two U.S. producers, Alpha Natural Resources Inc., and Walter Energy Inc., filed for bankruptcy last year.
“We would expect metallurgical coal supply cut announcements to continue to filter through into the market in 2016, namely more from the U.S., on the export side,” Andrew Cosgrove, a Bloomberg Intelligence analyst in Skillman, N.J., said in a webcast presentation Thursday.