In relation to commodities oversupply facing steelmakers, the broker cut both its hard coking coal and iron ore forecasts.

“Our hard coking coal forecast for 2015 and 2016 has dropped by 4% for both years to $US114/t and $125/t free on board Australia respectively,” it said yesterday.

While the broker previously had a $64/t price settlement prediction for annual thermal coal price settlements with Japanese utilities (kicking in from April 1), it has significantly lifted its expectations following Glencore’s announcement in late February over plans to cut 15 million tonnes of annual production from its Australia operations.

“We have had to raise our Japanese Fiscal Year thermal coal contract forecast to $70/t FOB Australia owing to the successful moves by producers to raise supply concerns – as a result this year’s contract will be up in Australian dollar terms,” Macquarie said.

“Despite this, we still see a need for tonnes to exit the seaborne thermal coal market into mid-year, necessitating a further spot price decline.”

Meanwhile, Westpac senior economist Justin Smirk recently told the ABC that coal and iron ore prices were not likely to rise until at least 2016.