Macquarie sees coking coal prices at USD 110 down by 63%

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Bloomberg, citing Macquarie Group Ltd, reported that benchmark prices for coking coal sold to steelmakers will drop by 63% from a record last year as demand for the metal slumps. The supply agreements typically run from April 1.
It said that “Coking coal will sell at USD 110 per tonne when annual deals are struck between producers including BHP Billiton Mitsubishi Alliance and Asian clients.”
The figure is down from Macquarie’s previous estimate of USD 140 and compares with last year’s price of USD 300.
Mr David Pleming in Cape Town wrote in a note dated January 16th 2009 that “The reversal in steel production for 2009 may see seaborne metallurgical coal demand drop 27 million tonnes or 12%.”
He added that “Macquarie kept its forecast above USD 100 because coking coal remains a scarce resource as new projects face significant challenges and local Chinese prices are strong.”
(Sourced from Bloomberg)