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Foul fundamentals will curb world coal

Wednesday, June 7, 2017


Coal market outlook


Coal prices rallied by more than 70% in 2016 after five years of decline, making it one of the best-performing commodities last year alongside iron ore. In December 2016, the price of Australian thermal coal -- the benchmark for the Asian market -- hit 100 dollars per tonne for the first time since 2012. The price has eased to around 85 dollars, but Chinese demand remains strong -- imports rose by 33% during the first four months of the year, nearly 10% faster than in the corresponding period of 2016.


  • Coal imports by Pakistan, Turkey and several ASEAN nations will rise to 2021, checking the deceleration of seaborne thermal coal trade.
  • The Panama Canal expansion is allowing Colombia to export more coal to Asia and trade flows should increase as the route gains traction.
  • Mines restarted in Indonesia and Australia at the end of 2016, but these will remain the exception to the longer trend of declining supply.

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