Newcastle coal futures, the benchmark for the top consuming...

Newcastle coal futures, the benchmark for the top consuming region of Asia, bottomed around the $350 per tonne mark and are now more than 20% down from their September peak of $450, as prospects of increased supplies and reduced demand prompted investors to unwind some long positions. Top consumer China recently permitted three central government-backed utilities and its largest steelmaker to resume coal imports from Australia, the first such action since Beijing imposed an unofficial ban on Australian coal imports in late 2020. At the same time, warm weather, particularly in the US and Europe, has delayed the winter heating season while easing some concerns about fuel shortages. Still, China is taking significant steps to boost its economy and end its strict coronavirus-induced regime, which, in turn, should increase demand for coal in the medium-to-long term.

Coal is expected to trade at 376.78 USD/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 431.93 in 12 months time.

trading economics still very bullish.