AME GROUP TACTICAL METALLURGICAL COAL OUTLOOK
March
2014

The Market
While premium HCC quarterly contract prices rose 5% in the December quarter 2013, they fell by 6% in the March quarter
2014, and were settled at US$143/t for German Creek low-vol HCC coal to Japan, and Peak Downs and Saraji to Europe.
The contract price for mid-vol Moranbah North coking coal is US$139/t for the March quarter. These are the lowest HCC
contract prices in four years and reflect the oversupply and subdued demand on the coking coal market. However they are
considerably higher than the March 2014 spot prices of US$117/t for low-vol HCC and US$106/t for mid-vol HCC.
Spot prices are US$98.75/t for LVPCI and US$83.50/t for SSCC. Our 2014 average price forecasts for PHCC are US$156/t,
LVPCI US$126/t and SSCC at US$99/t. We expect that the June quarter contract price for PHCC will be US$150/t, LVPCI
US$121/t and for SSCC $96/t. With such low prices there is considerable pressure for producers to cut costs as well as
production.