Australia’s metallurgical coal export earnings expected to fall in FY 23-2024

Australia’s metallurgical coal export earnings are forecast to track with price movements, peaking at A$68 billion in 2022-23, before falling back to A$46 billion by 2023-24, according to the quarterly outlook report by the Australian government’s Department of Industry, Innovation and Science. Metallurgical coal prices have risen since early August but remain well below the levels reached in the March-June period. While metallurgical coal prices have increased in recent months, it is not expected that this rise will be sustained for long. The increase was largely driven by temporary supply disruptions, and demand remains relatively constrained with global steelmaking output likely facing a period of softness. Supply disruptions are expected to ease somewhat with the potential end of the La Niña cycle in the March quarter of 2023. The Australian premium hard coking coal price is forecast to average at $377/mt in 2022, but is expected to fall to around $230/mt by 2024. Australian metallurgical coal export earnings remain reasonably strong in the final quarter of 2022, boosted by higher demand from Europe, Japan, Taiwan, and South Korea. Exports benefited somewhat from higher prices in late 2022, but were constrained by supply disruptions among Australian operators. Long-term factors for metallurgical coal output remain largely positive. Higher production in New South Wales and Queensland is expected to push Australia’s exports up from 163 million mt in 2021-22 to 183 million mt by 2023-24.