NUSA DUA, INDONESIA – Something has changed in the coal industry. For the past 22 years Asia’s coal producers, traders and buyers have gathered in the Indonesian resort island of Bali to discuss the state of the sector.
In recent years these have been pretty depressing affairs as participants bemoaned the ongoing slump in prices, prayed that things couldn’t get any worse and then lamented when they did.
But this year was different. For the first time since 2012 there was a mood of optimism at the annual Coaltrans Asia meeting. What remains to be seen is whether this new-found view that the worst is past has any basis in reality, or whether it’s just a different type of delusion for the beleaguered coal industry.
Much of the optimism is based on the fact that the benchmark Asian coal price, the Newcastle weekly index, has risen almost 3.9 percent so far this year, ending last week at $52.59 a tonne.
If that sounds like a modest increase, it has to be seen in the context of a commodity that has fallen for the past five years, and is still 61 percent below its post-recession peak in January 2011 of $136.30 a tonne. Not to mention that it’s also worth little more than a quarter of its all-time high of $194.79 reached in the giddy boom prior to the 2008 global recession.
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