The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
SEATTLE — Global coal markets are depressed amid a supply glut, but reports of the commodity’s demise have been greatly exaggerated, a new study says.
Prices for thermal coal, a commodity used by power plants to generate electricity, fell recently to less than $75 (U.S.) a tonne, compared with $190 in mid-2008. And prices for metallurgical (or coking) coal, a key ingredient used in the production of steel, have tumbled to $120 a tonne, from $300 in late 2011.
Some industry observers have warned that there will be many more dark months ahead for the coal industry. But the long-term forecast calls for robust Asian demand, which should give producers hope, as long as they are able to ride out the tough times.
“Despite increasing environmental opposition to the use of coal, coal still plays a crucial role in the global energy mix and will continue to do so for the foreseeable future,” according to a study by Shoichi Itoh, senior analyst at the Tokyo-based Institute of Energy Economics. “The importance of coal use will be all the more important in Asia.”
For now, the pain in Canada is being felt on the metallurgical coal side, with Birmingham, Ala.-based Walter Energy Inc. suspending coal-mining operations in northeastern British Columbia and temporarily laying off almost 700 employees, including 415 workers near Tumbler Ridge.
Vancouver-based Teck Resources Ltd. has decided to defer additional spending on reviving its Quintette coal property and cut 80 jobs near Tumbler Ridge.
Westshore Terminals Investment Corp.’s Canadian facility south of Vancouver handles mostly metallurgical coal, but thermal coal exports are on the rise at the operation, including shipments of U.S. thermal coal transported by train from the Powder River Basin in Wyoming and Montana.
In the United States, low prices have been especially hard on producers of thermal coal, notably those in the Powder River Basin.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/asian-coal-demand-is-set-for-robust-revival-study-says/article18454566/#dashboard/follows/