RE: more on iron ore and met Very promising news for Met. Coal see below. Hopefully this will trigger some buying interest in Cline over the next few months or investment infusion for stake in the company.........
New Year heralds some path breaking development in the coking coal market. Opening with scoop of China annulling 40% export tax on met coke export market was abuzz with its fallout.
Traditionally China has been a major exporter of met coke owing to value addition stipulations. Met coke is used as a charge in blast furnace by steel mills without coke oven. Met coke exports plunged to about 1 million metric tonne this year amid the curbs, from an annual average of 15 million tonne between 2000 and 2007.
However with abolishment of 40% taxes under WTO regulations will certainly rekindle demand for coking coal as feed material. Even though China produces coking coal it is of inferior quality and mills are dependent on import from Australia and Mongolia of late. Under the changed tax regime it is expected that an additional demand of 20 million tonnes will be generated by China.
Even though Mongolian miners will have logistical advantage they are unlikely to meet full demand and sourcing from Australia and US is inevitable.
Approaching monsoon and the peril of flooding in Pacific region mines will catalyse the flare. Moreover the Japanese government announcing USD 265 billion stimulus package for the economy would lead to enhanced steel production and ensuing coking coal consumption giving leverage to the price.
Holistically coking coal market is all set fireworks in Q2 and Q3.
Source - Strategic Research Institute