Analysts forecast coal price boost this quarter

Since Coal production cuts and demand has risen in the Asian region, coal price are expected to boost in this quarter, The Heralds reports the Newcastle thermal coal hit their lowest point since 2009 in Q3 2013 with the price of $77.06 per metric ton, according to data obtained by the The Herald from HIS McCloskey

Some major analysts are expecting a price to rebound by almost 10%. Morgan Stanley forecasts a fourth-quarter average of $82 while CIMB Group Holdings Bhd predicts even higher price of $85 per metric ton.

Mark Pervan, The head of commodity strategy at Australia and New Zealand Banking Group Ltd told that "theres going to be a bit more buying activity from the Chinese". Morgan Stanly analysts also added that Chinese power plants are holding the lowest coal inventories in two years

In addition to that BMO commodity Strategist Jessica Fung recently made a statement that "iron ore and cooking coal could get a boost due to higher than expected steel output in China", the Financial Post reports.

Several factors may temper these optimistic forecasts as Chinese growth could slow next year as predicted. The weakness of the India Rupee is also making coal more expensive to import as India is the worlds second biggest coal importer, it could potentially lowers the price of coal to cover up their delivery costs.

Source: Mining.com

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