(Bloomberg) — Coal prices across Asia are surging to records, underscoring a challenge for governments seeking a faster energy transition: the dirtiest of fuels they’re racing to phase out is enjoying booming demand.
Power plants are rushing to secure adequate electricity supplies as a hot summer adds to demand from the region’s post-pandemic industrial revival. On top of that, output in some key producer nations has been hurt, while high natural gas costs mean there’s no cheaper alternative for utilities to turn to.
All that has sparked a coal rally in Asia, the center of demand for the fossil fuel. The price of physical coal cargoes in Australia’s Newcastle and China’s Qinhuangdao ports have soared more than 50% this year to their highest ever.
Futures are also up, with those in Australia jumping almost 50% and prices in China more than doubling.
“Coal prices just keep on punching higher,” said Sydney-based Peter O’Connor, an analyst at Shaw & Partners Ltd. “We’re close to the top in terms of pricing, but I don’t think we’re there yet.”
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