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An increase in availability of metallurgical coal has weighed on prices, with premium coking coal down 30% so far this year.
“In Australia, a relatively dry start to the southern hemisphere summer combined with a rush to benefit from the high prices has seen exports jump strongly late in Q4 2016,” the report states.
“At the same time, we have seen exports from Mongolia to China rise strongly in the later part of the year. This all occurred as the Chinese authorities relaxed restrictions on coal mining.”
However, lingering supply side issues should halt the recent slide in prices, according to ANZ.
“Australian exports have appeared to plateau, with January exports falling 15% month on month while further growth from Mongolia also looks unlikely,” it said.
“More importantly, we expect China to reinstate restrictions on coal mining, keeping import demand high. This should see spot prices stabilise around $US170-180/t in H1 2017.”
