Coal news and updates

Thermal coal prices to remain under pressure

The Globe and Mail reported that the reign of King Coal is looking increasingly precarious as both the United States and China aim to cut their dependence on coal fired electricity to reduce greenhouse gas emissions.

Coal prices have slid around the world this year, and will continue to slump in the face of supplies of cheap North American natural gas and increasing environmental pressures

Mr Thomas Pugh, a London based analyst with Capital Economics, said “We expect global demand for coal to be subdued and prices to fall further over the next few years as major consuming countries, including China as well as the U.S., take fresh steps to reduce pollution.”

Mr Pugh said it would take significantly higher gas prices in the United States to reverse the trend that has seen gas replace coal in the electricity sector.

Given the greater environmental pressures facing coal, he said natural gas-fired power would have an advantage even if gas prices were to rise to USD 5 or USD 6 per thousand cubic feet from Friday’s closing of USD 3.69 on the New York Mercantile Exchange.

As gas prices hit rock bottom in 2012, coal’s share of the U.S. electricity market dropped to 37 per cent from 41 per cent in 2011, according to the U.S. Energy Information Administration. But coal-fired power remains the largest single industrial source of greenhouse gas emissions in the United States.

Source – theglobeandmail.com