LAUNCESTON, Australia, Sept 18 (Reuters) – It is increasingly popular to write obituaries for coal, with analysts, market watchers, investors and utility bosses leaping on the bandwagon, declaiming that the days of the polluting fuel are numbered.
Certainly the long-term outlook for coal is becoming less certain as more countries commit to ending, or severely curtailing, use of the fuel. But while the doomsayers may eventually be proven correct, coal is enjoying a stellar year, particularly in Asia, the main demand centre.
The price of benchmark prices for thermal coal at Australia’s Newcastle Port slipped toward the end of last week, but still ended above $100 a tonne on Sept. 15. The contract rose 45 percent from the closing low of $71.30 a tonne on May 16 to a peak of $103.50 on Sept. 12, providing a bonanza for miners in Australia and Indonesia, the two largest exporters of thermal coal used in power stations.
Metallurgical coal, used to make steel, hasn’t had quite as good a year as thermal, but is still holding above $200 a tonne. Singapore Exchange contracts, priced against the Steel Index assessment of Australian cargoes, ended at $207 a tonne on Sept. 15, down from a cyclone-induced peak of $285 in early April, but largely steady from the $226.50 a tonne they fetched at the start of this year.
While coking coal has been affected by weather-related disruptions in Australia, the price of thermal coal has mostly been driven by Chinese import demand.