Goldman Sachs Group Inc. has responded to the dramatic coking coal rally by saying higher prices for this year’s best performing commodity may be here to stay.

Spot hard coking coal has more than doubled this year to trade above $205 a metric ton as a new Chinese government policy reduced the number of annual working days at its mines. Goldman, in a note dated Thursday, raised its 2017 price forecast by 64 percent to $135 a ton and its 2018 estimate by 47 percent to $125. That compares to the current third-quarter contract price of $92.50.

“We update our price forecasts in order to reflect a different environment,” analysts Christian Lelong and Callum Bruce wrote in the report. “We see upside risks if current policies remain unchanged going into next year and the resulting shortage overwhelms the ability of producers in Australia and the U.S. to respond.”


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