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Coal prices keep dropping as Asian demand ebbs

Coal News - Published on Thu, 15 Oct 2015

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Reuters reported that coal markets continued to test new lows over the past week, with both physical and futures prices falling further as demand wanes along with Asia's slowing economies.

China, the world's biggest coal user, producer and importer, bought 17.77 million tonnes of coal overseas in September, down 16 percent from a year ago, with weak demand and a domestic supply glut continuing to weigh on shipments.

Imports over the first nine months fell 29.8 percent to 156.36 million tonnes, with foreign suppliers struggling to compete in a massively oversupplied market.

India, another huge coal consumer and importer, has also started to order less shipments as its domestic output has begun improving following years of falling behind target.

As a result, cargo prices for Australian coal from its Newcastle terminal which largely supply China, and shipments from South Africa's Richards Bay, which ships much of its coal to India, have become around a third cheaper since their 2015 peaks, last settling at USD 53.60 and USD 49.55 a tonne respectively, and both are now below their 2008-2009 global financial crisis lows.

One coal trader said that "The situation in Asia for coal sellers is pretty bad. It's been bad for a while, but I still can't see any sign of a fundamental improvement until something on the supply side really budges in the form of a major reduction or closure."

European physical coal cargo prices for delivery into its main terminals at Amsterdam, Rotterdam or Antwerp (ARA) are also down sharply this year, shedding over 20 percent from their 2015 peaks to a last settlement of USD 51.70 a tonne.

Source :

Posted By : Robichandra Sanasam on Thu, 15 Oct 2015
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