Coal prices face stark forecasts to 2024: KPMG

coal

KPMG has predicted the decline of coal prices towards 2024 with a fall of more than 20 per cent on the horizon for hard coking coal.

The multinational advisory released its quarterly coal price and FX market forecasts report for September/October 2021, the first release since the beginning of 2020 to predict a decline in coal prices.

The report took a current average price for hard coking coal in the mid-$US180s per tonne.

It showed this average price to remain steady in 2022 before diving to $150 in 2023 and into the mid-$140s by 2024.

According to the report, 2025 showed a slight rebound to about $150, however, fewer contributors hazarded a guess at these longer-term forecasts.

KPMG fielded the forecasts of 23 separate contributors, each from various research databases and broker reports on the price of hard coking, PCI, semi-soft coking and Newcastle benchmark thermal coal.

The latter three coal prices also received negative forecasts.

The last time hard coking coal was forecast to decline was in the December 2019/January 2020 report, when the 2020 price of about $154 per tonne was expected to drop marginally down to $150.

The report came in the wake of several major deals surrounding the future of coal.

The first being BHP’s sale of its stake in BHP Mitsui Coal (BMC) for $1.8 billion to Stanmore Resources, releasing the mining major of the Poitrel and South Walker Creek metallurgical coal mines.

This was another example of a major miner offloading its fossil fuel assets to rid itself of the environmental backlash.

Rio Tinto was already doing the same back in 2013, offloading the Clermont, Blair Athol and Coal & Allied assets, before later selling the Kestrel coal mine in 2018 for more than $US2 billion.

A joint statement from more than 50 countries and organisations was signed at the United Nations’ COP26 in Glasgow earlier in November, in an agreement to transition from coal power to clean power.

While Australia was not one of the dozens of parties to sign the Global coal to clean power transition statement, intentions have been made clear by the likes of BHP, Rio Tinto and Anglo American to sell out of coal mining while prices remain feasible.

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