Lack of Demand Still Hurting Australian Coal

The Financial Times reported that weaker Chinese demand for Australian coal is having wide-reaching consequences for Australia’s economy — unfortunately, they are largely negative.

As quoted in the market news:

The spot price of thermal coal, used for power generation, has fallen about 30 per cent over the past couple of years to under $80 a tonne, while contract prices for coking coal, a key steelmaking ingredient, have dropped 50 per cent to $145 a tonne.

The impact of falling prices is stark. Data from the Bureau of Resources and Energy Economics project Australia to have shipped 330m tonnes of coal in the year to June 2013. However, it will receive A$17bn less in revenues than it did in 2011 when it sold 300m tonnes of coal, and almost A$17bn, or 30 per cent, less than in 2009 when it exported 260m tonnes.

Click here to read the full Financial Times report.