The Coal Trader's 2025 Metallurgical Coal Outlook - Part 1
A Challenging Year Lies Ahead, But There's Still Light at the End of the Tunnel
Whenever I sit down to do forecasts, I’m mindful of the fact that as hard as I might try to get things right, I won’t. Literally every single forecast in history has been wrong as soon as the author typed “The End”. At that point, the work stopped being a living, breathing, iterative Bayesian process. And in its place was left a boring old “white paper” whose assumptions are forever frozen in time.
The truth is that there are always arbitrary factors that lie far beyond anyone’s control. While I may hold reasonable views on topics like geopolitics, economic conditions, or the weather, each lies far outside my core competencies. And for the most part even trying to predict those types of things is a fool’s errand, as fallible humans often do unexpected things, economists make stuff up, and sometimes storms turn left instead of right.
To that end, price forecasts often remind me of the beginning of the movie The Big Short, which opens with this (likely spurious) quote from Mark Twain.
If there’s one thing I want all of you Coal Traders to take away from this piece, it is this sentiment. Forecasts are NOT predictions of what is certain to come, regardless of whatever your favorite flapping head furu might say…and that includes this guy.
At their very best, forecasts are an imperfect snapshot of a single moment in time, framed by unreliable economic and geopolitical assumptions, and captured by the faulty camera in our minds. And this one doubly so, as I plan to keep this perspective at a very high level given our diverse subscriber mix of industry experts, generalists, and retail audiences here on Substack.
It is also quite long, and thus I’ve had to separate it into two parts.
The first – a review of 2024 and a look forward at supply changes over the next few years follows on here. We’ll follow up with demand changes and price implications tomorrow.
So with that in mind, let’s dig in…