PITTSBURGH It makes "more
sense" to have shorter pricing terms for metallurgical coal,
according to Jim Truman, principal analyst at consultant Wood
Metallurgical coal contract
prices are currently priced on a quarterly basis, which avoids
the volatility associated with spot-market pricing.
Shorter-term contracts would give metallurgical coal producers
the flexibility to adjust prices to reflect consumer demand and
input costs, Truman said at the 16th annual Smithers Apex Met
Coke World Summit in Pittsburgh.
The Edinburgh, Scotland-based
consultancy expects metallurgical coal prices to improve over
the long term.
"GDP (gross domestic product)
growth in China and India is expected to remain very strong
through to 2030. Chinas GDP is expected to grow 5.7
percent (annually), while Indian GDP will grow by 6.8 percent
year on year," he said. "It will drive the increase in crude
steel and demand for met coal. India and China will dominate
the seaborne coal market through to 2030."
Wood Mackenzie believes the
long-term outlook for the metallurgical coal market is "robust,
given strong GDP," Truman said. "Output is expected to grow by
150 million tons by 2030."
A version of this article was first
published by AMM sister publication Steel