Australian diversified miner South32 Ltd S32.AX said on Thursday higher metallurgical coal prices would help offset a 15% drop in first-quarter production of the steelmaking material.
A power crunch, environmental curbs and a debt crisis gripping China's property market has clouded the outlook for the steelmaking material, sending prices higher. However, supply outside China has so far remained inelastic to the sharp price increases.
"While the lower total volumes are expected to adversely impact Operating unit costs, realised prices will benefit due to
fewer sales of the lower-priced product and the current strong metallurgical coal market," the company said.