CIAB Market & Policy developments 2005/06 - IEA

140
Chart 7 - MCIS Steam Coal Marker Prices
Source : The McCloskey Group (www.mccloskeycoal.com)
120
$US/tonne
100
80
60
NW Europe
Asia
40
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
177. Prior to 2007, international steam coal prices had peaked in the second half of 2004 with
the ARA CIF delivered price reaching about US$79/t. Prices delivered to European
distribution ports were on a declining trend during 2005 and the ARA CIF delivered price
was down to $51/tonne by the end of the year, with Asian market prices apparently
following the Atlantic market. However, prices increased steadily throughout 2006 and
2007, with rapid increases in Asian market prices from March 2007 leading the way and
illustrating the effect that Chinese demand for coal, other commodities and shipping
continues to have on world markets. In the second half of 2007, European spot prices
again led the rapid increase in prices, driven by demand in that region and influenced by
continuing infrastructure constraints affecting Australian exports. By November 2007.
NW European prices were averaging almost $130/tonne with Asian prices over
$20/tonne lower.
178. In the United States of America, limited information is available on spot prices for
selected coal types in Central Appalachia, Northern Appalachia, the Illinois Basin, Power
River Basin and the Colorado Uinta Basin. The information is prepared by “Platts Coal
Outlook” and is available graphically, with permission, on the US Energy Information
Administration (EIA) web site
(http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html#spot).
179. The Powder River Basin spot coal price rose steadily during 2005, from the level of just
over $5/ton seen for most of 2003 and 2004, and peaked at above $20/ton at the start of
2006. It then declined steadily again to reach $10/tonne in October 2006 and has
remained at, or just below, that level through to August 2007. Central Appalachian spot
prices fell dramatically from their previous level of $65/ton in August 2006 and fell again
in January 2007 to $40/ton. Since then they have increased again to over $45/ton.
Northern Appalachian coal prices increased from under $40/ton in mid 2006 to reach
$45/ton in August 2007.
180. FY2006 metallurgical coal term contract prices for Japanese Steel Mills (JSM) decreased
for the first time in three years, with the softening market resulting from coal suppliers
increasing their production in response to previous high prices while major steel mills in
Japan, U.S.A. and the EU reduced their steel output after summer 2005.
181. The JSM term price of hard coking coal for FY2005 was US$125/tonne FOBT but for
FY2006 premium hard coking coal was settled between US$114–116/tonne FOBT, and
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