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Reuters reported that while coal prices rebounded from multi-year lows this week, the longer-term outlook remains weak. That’s largely because demand for the fuel is being tamped down by cheap oil and lower consumption in major markets.
Reuters reported that while coal prices rebounded from multi-year lows this week, the longer-term outlook remains weak. That’s largely because demand for the fuel is being tamped down by cheap oil and lower consumption in major markets.
As quoted in the market news:
In January, physical thermal coal prices fell below levels last seen during the 2008/9 global financial crisis, hit by a combination of factors, including tumbling oil prices and excess supply as a result of slowing economic growth and the rising use of alternative fuels for power generation.
However, a recent cold snap in Europe, northern Asia and North America has led to a spike coal demand and prices.
“There was a sudden cold snap pretty much everywhere, so a lot of utilities burned more coal than expected, and they are now ordering to restock in case there’s another spell of cold,” a coal trader said.
Coal cargoes for shipment from Australia’s Newcastle terminal last settled at $52.45/t, up almost 8% from January’s low of $48.60/t.
Prices for cargoes from South Africa’s Richards Bay jumped more than 13% during the time to $56.55/t.
European benchmarks remained the weakest, with cargoes for delivery into Amsterdam, Rotterdam or Antwerp (ARA) last closing at $45/t, near multi-year lows hit at the end of January.