Guest post by David Middleton
Coal prices are on the rise again. With benchmark rates in Australia up over 30 percent since July — approaching the $100/t mark that prevailed in November 2016 after a massive run-up last year.
And a number of events the past week show that things could get even more heated in coal over the coming months.
The biggest story recently has been China. Where a push to restrict coal imports has driven local prices to multi-year highs. With data this week from Platts showing that 102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads.
And China isn’t the only place where demand is going up. With South Korea also seeing record coal imports of late — bringing in an all-time high 11.3 million tonnes in September, with October imports expected to set a fresh record at 12 million tonnes.
That’s reportedly coming as new coal-fired plants start up, and Korean nuclear plants experience downtime. Meaning Korean users are scrambling for supplies — even as mine output may be about to take a hit.
That threat of lost supply — and rising global demand — is all coming just as new and significant players are entering the coal space. Such as Bangladesh: where state minerals firm Petrobangla said this week it is looking at buying stakes in coal mines in South Africa, Australia and Indonesia.
Petrobangla’s stated goal is to acquire captive supply for export back to Bangladesh’s surging coal-fired power sector. Which would mean one more mouth to feed at a time when supply and prices are getting extremely tight.
Watch for ongoing import numbers in China and Korea, and for South African strike announcements and Bangladesh deals.
By Dave Forest
What could be even better than “soaring” coal prices? The resurgence of the American coal industry and surging U.S. coal exports!
Why are U.S. coal exports surging? The end of the War on Coal is one factor… But the fact that U.S. coal prices are far less than the $100/t level.
Even better news for coal: Despite the surge in prices, coal is still highly competitive with natural gas (~$3/mmbtu) in these nominally United States…
To paraphrase the great Samuel Clemens “The reports of coal’s death are greatly exaggerated.”
With Tesla and EV’s floundering and coal surging… What on Earth can save us from Gorebal Warming? (wink-wink-nudge-nudge)