Thursday April 16, 2015, 4:02pm PDT
Mining Weekly reported that Moody’s Investors Service sees metallurgical coal and iron ore prices remaining under pressure “at least” through to 2016. The firm has thus lowered its price expectations for both commodities.
As quoted in the market news:
The firm fingered slower steel output growth in China and rampant oversupply, particularly in iron-ore, for holding prices down for these critical steelmaking ingredients.
Moody’s said Wednesday it had lowered its price sensitivities for iron-ore to a range of $40/t to $50/t, while met coal ranged between $100/t and $110/t.
In its report, ‘Iron-ore, met coal drowning in oversupply’, the credit rating firm noted that the supply side was slow to respond to the falling prices. Production cuts announced by met coal producers in the US, including Arch Coal and Alpha Natural Resources, were taking longer than expected to be implemented. Iron-ore producers were also shuttering operations or filing for receivership; however, the amounts they represented paled in comparison to expected new supply.