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Prices of coking coal, the steel-making kind, keep soaring on slowing supply growth from China and increased demand from Indian steel mills.
Far seems to be the multi-year lows struck in February, as the commodity has surged more than 80% since then, jumping 41% in August alone to nearly $140 a tonne, the highest level in over two and a half years.
This chart shared by the Metal Bulletin in Twitter Wednesday says it all:
The rally has been triggered in part by Beijing’s decision to limit coal mines operating days to 276 or fewer a year. In addition, recent heavy rains in the key mining province of Shanxi, have significantly reduced the number of available roads and damaged other transportation infrastructure, curbing local supplies.
The rally has been triggered in part by Beijing’s decision to limit coal mines operating days to 276 or fewer a year, and bad weather affecting key suppliers.
Bad weather and operating issues have also kept supply subdued in Australia. The country, a main source of coking coal for major consumers such as India and China.
Based on figures released by Australia’s Department of Industry, Innovation and Sciences in July, the country’s metallurgical coal production is expected to jump by roughly 2% to 192 million tonnes in the current financial year.
However, the agency also said that the country’s metallurgical coal export earnings are likely to decline by a further 5% to A$18.2 billion in 2016–17 due to “lower prices and subdued growth in volumes”.
Australia’s coal exports — both metallurgical and thermal — were worth A$37 billion in 2015, official data shows, which is equivalent to nearly 12% of all the nation’s exports of goods and services, and second only to iron ore in terms of total value.
