Exxaro Resources expected European buyers to keep solid purchases of South African coal next year as long as they continue to look for alternatives to Russian coal, the company said on December 1.
Meanwhile, South African exports of high-CV thermal coal to other markets such as South Korea and Japan are also expected to increase in 2023, Exxaro said.
Rising natural gas prices since the Northern Hemisphere entered winter are expected to keep bolstering seaborne thermal coal demand and prices, while Asia-Pacific buyers' demand for South African coal will remain firm due to its price advantage over Australian coal, the company said.
In addition, tight supply and higher prices in the seaborne thermal coal market have already impacted the South African domestic market. Exxaro expected South Africa's domestic coal prices to remain high in 2023.
In light of the ongoing challenges to rail capacity in South Africa, Exxaro said it will continue to pursue a market-resource optimization strategy to diversify exports by shipping coal to alternative ports.
Exxaro said that optimizing operations and digital solutions will be an effective guarantee for the company to remain cost competitive in the face of current value chain disruptions and unprecedented challenges.
In the iron ore market, Exxaro expected global steel production to remain relatively stable in 2023.
However, the company noted that market opportunities from increased steel production in China and the potential risk of another decline in seaborne supply will ultimately affect iron ore price levels in 2023.
(Writing by Alex Guo Editing by Tammy Yang)
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