Coal news and updates

International coal prices may ease as mines re-start

The recent upward rally in steam coal prices in international markets was primarily triggered by a firm trend in the paper market that had led to a jump in leading indices. But the resumption of operations in some of the closed mines in Australia and China in the coming days may lead to softness in prices, feel sources in India.

“The spot prices of Australian steam coal jumped because there was shortage of coal in the country in the aftermath of miners closing some of the mines as operations turned economically unviable in view of the sharp fall in prices till the beginning of 2016. However, with the sudden revival in Chinese demand, there was a temporary shortage of coal and that has caused a spurt in prices,” they said.

“When should the price of coal rise? It should rise only if demand is there in the market! How much demand was there from China that would have lifted the prices to the current levels? A hype was created and that led to the spurt in prices,” a source said.

“China has already accumulated whatever coal it had to and now it is again going slow as far as imports are concerned. Today China is not buying any coal other than that of Indonesian origin. And because the price of coal has increased in the international markets, China is again planning to increase its own domestic production,” the official added.