October 07, 2008

JPMorgan increases 2008 coal price outlook

Bloomberg reported that JPMorgan Chase & Co boosted price estimates for coal used by power generators and steelmakers by as much as 17% because of rising imports into China and increased steel output.

JPMorgan lifted its forecast for a tonne of coal in 2008 to USD 70 from USD 60 before. It analysts in a report said that the estimate for hard coking coal to USD 120 a tonne from USD 105 per tonne.

They said that “The Chinese will be net importers' of power coal. Strong demand from fellow Asian countries will keep the markets tight.''

JPMorgan expects supply to increase after 2008 as producers respond to the high margins on offer pushing prices lower. The report said that the fuels will fall in the following two years on rising supply.