Coal markets are awash with the fossil fuel as supply rises and demand comes under pressure, which it is likely to push prices for the commodity near the lowest in five years, reports show.
According to data from UBS AG and Bank of America, published by Bloomberg, exports are not expected to move up much, even with a higher seasonal demand for coal as the Northern Hemisphere heads into winter.
The forecast average price of coking coal, used for steel making, is expected to stay around $125 a tonne for the rest of the year, compared with $159 in 2013.
Outlook for thermal coal, used mainly for energy generation, is not much healthier. The Australian and New Zealand Banking Group forecasts an average price this year of $74 per tonne, against $84 a year ago. ANZ Research says the situation is “unlikely to improve in the near, or medium, term” and has downgraded price estimates for the next three years.