SINGAPORE/MELBOURNE (Reuters) – Australian thermal coal prices have risen to their highest level since 2012 as hot weather across North Asia spurs buying ahead of the peak summer demand season.
Spot prices for thermal coal cargoes for export from Australia’s Newcastle terminal last closed at $115.25 per tonne, the highest level since February 2012. Thermal coal, the world’s most used fuel for electricity generation, has surged by 130 percent since its record lows below $50 per tonne in 2016 following a years-long decline.
Prices have been driven up by economic growth, especially in Asia, along with constraints on supply due to earlier mine closures and high hurdles to developing new mines amid concerns about pollution and global warming.
In recent weeks, a heat-wave in North Asia and restocking ahead of the hottest summer months in July and August have led to soaring demand for both residential and industrial cooling, traders said.
Weather data in Thomson Reuters Eikon shows that large parts of North Asia, including cities like Beijing and Tokyo have experienced unusually warm weather since late May.