Global Markets

Coal prices driven by tight supply and Asian demand

Reports of coal's demise look to be premature as prices have angled upwards in Asia, with supply bottlenecks and increasing demand in Asia being the main causes Reports of coal's demise look to be premature as prices have angled upwards in Asia, with supply bottlenecks and increasing demand in Asia being the main causes.
By Peter Stewart 21 October 2016 0 31274
Coal mine in Shanxi, China Beijing wants coal production capacity to be cut by 250 mt this year. (PA)

Recent supply disruptions in Indonesia and capacity cuts in China have tightened markets and caused a sharp rise in Asian coal prices, as reflected in Australia’s benchmark Newcastle futures contract.

China’s National Development and Reform Commission (NDRC) said it will act to stabilise rising coal prices, which it blamed on high temperatures over the summer and temporary logistical and transport problems. But it showed no sign of reversing coal capacity cuts.

Beijing wants coal production capacity to be cut by 250 mt this year, but it estimates...