UBS slashes US coal price forecasts for 2009 and 2Swiss bank UBS AG has lowered its forecast for US coal prices in 2009 and 2010, on the back of world economic slowdown.
Reuters citing analysts reported that analysts have cut the price for hard coking coals for steel making to USD 85 a metric tonne in 2009, from USD 180 and to USD 115 in 2010, from USD130.
The price for thermal coal for power plants is also lowered to USD 55 a short tonne 0.91 metric tonne for premium grade in 2009, from USD 70 and to USD 60 a tonne in 2010, from USD 65.
The analysts wrote that there could be lower coal production in the US, as many companies are slowing capital investment and considering idling high-cost mines.
US coal supply in 2009 is expected to decline 19.2 million tonnes after rising 15.8 million tonnes in 2008, the report estimated. Total US production exceeds 1 billion tonnes.
The report said that U.S. exports rose sharply in 2007 and 2008 as the worldwide economy boomed and competing exporting countries had delivery problems. It said that less US output could limit oversupply and mitigate long term price impact. Steel-making coal remains in short supply and would rebound first in economic recovery.