The Sydney Morning Herald reported that although the third quarter of 2013 was the worst in four years for Asian coal prices, they are now set to rally on the back of strengthening Chinese demand and Australian coal production cuts.
As quoted in the market news:
Steaming coal at Newcastle port, the Asian benchmark, averaged $US77.06 a tonne in the third quarter, the lowest since the same period in 2009, according to data from IHS McCloskey.
Morgan Stanley forecasts a fourth-quarter average of $US82 while CIMB Group Holdings predicts $US85.
Morgan Stanley says the coal glut will reach 14 million tonnes this year, or 1.6 per cent of global seaborne supply. A 25 per cent drop in supplies at Chinese power generators signals that demand for imports may increase.