Thermal coal approaches 4-year lows

11 September 2013 | 12:56 Code : 21874 Geoscience events
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Thermal coal dipped to US$78 on Wednesday as a result of weak demand, nearing its....

Thermal coal dipped to US$78 on Wednesday as a result of weak demand, nearing its lowest level since 2009 and raising questions about its profitability.Too much supply and lagging demand have pushed thermal down 17% over the course of 2013, according to the Financial Times.The appetites of the old reliable customers, China and India, seem to be waning, causing Australia’s powerhouse producers to embark upon economies of scale to achieve lower unit costs.As China’s economy transitions from export-based growth to higher domestic consumption over the next decade, coal demand will likely fall further still.The 2012 coal story was not about weak demand but more about abundant coal supply, according to Fabio Gabrielli of Mercuria Energy Trading. Now both factors are very much at play.

tags: ARDABIL


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