In his presentation “Myth busting – statistics on metallurgical coal markets”, delivered at the Wilson HTM Focus On Coal conference, the Macarthur vice-president for strategy and corporate development attempted to debunk many of the rumours surrounding expected pricing for metallurgical coal.

Stephan said that despite predictions that PCI coal prices would fall, as a symptom of over-supply and a fall in crude steel production, he had heard conflicting evidence.

He said that at the Coaltrans conference in October, the senior vice-president at South Korean steel maker Posco, Kwon, had said Posco intended to increase its PCI injection rates over the next five years from 170kg per tonne of hot metal to 220kg per tonne of hot metal production.

Stephan also said growth was restrained on PCI production, with Canadian producers experiencing delays on new projects and high costs.

He said rail distances and mining costs in Canada would tend to lead to Australian producers being lower cost producers.

Stephan said new Australian producers would come onto stream slowly, with logistics, including rail, port and water, delaying development. He said expansion of demand would account for new production into the foreseeable future.