Asian demand leads coal rally

By Peter Stewart 19 October 2016
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The Datang-Changchun coal power station. China’s appetite for the fuel is growing. (China Datang Group) The Datang-Changchun coal power station. China’s appetite for the fuel is growing. (China Datang Group)

It is fashionable to believe coal is on the way out of the electricity mix in Asia after the Paris agreement on climate change. But the remarkable rally in coal prices this month demonstrates that while coal demand may be down, it is definitely not out.

Outside of the United States, global coal prices have bounced by around a fifth in the past month, led by a surge in Asian coal prices to above $90 per ton. The rally has been largely supply-led, driven by tightness in Asia following cuts by leading producers. Lower production in China has forced the country to import more coal.

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