Investors controlling about $US2.6 trillion ($3.7 trillion) in total assets have made commitments to cut back or sell out of their holdings in fossil fuel companies, campaigners say, signalling the growing momentum of the divestment movement.
The actor Leonardo DiCaprio, who has joined the campaign, said on Tuesday that more than 2,000 individuals and 400 institutions were committed to taking their money out of fossil fuel companies.
…However, the largest investors have made only limited commitments, pledging to divest from coal companies while retaining large investments in oil and gas.
From the AFR:
Meanwhile, from Goldman on thermal coal:
Thermal coal is still the dominant fuel in power generation worldwide, but we believe the market is going ex-growth. The industry does not require new investment given the ability of existing assets to satisfy flat demand, so prices will remain under pressure as the deflationary cycle continues. Marginal production costs are on track to fall by approximately 30% over 2014-16 and we downgrade our thermal coal forecast for 2017/18 to US$54/52/51/1 FOB Newcastle. We also reset our long term forecast to US$50.
And coking coal:
Weaker currencies, lower fuel costs, and ongoing efforts to improve mining productivity are helping many producers to improve their competitiveness, but cost deflation only goes so far towards mitigating the impact of a 70% price fall in the past four years. We continue to see price risks as skewed to the upside in the long term because cost deflation alone will not put the metallurgical coal industry back on a sustainable path. A growing share of the market is experiencing financial distress, and even Tier 1 producers in Australia and Canada have marginal economics at current prices. However, the industry may have to endure prices below the marginal cost of production for longer than expected. Meanwhile, the role of the US as the marginal producer providing price support is eroding rapidly. On that basis we downgrade our price forecasts for 2016/17/18 to US$85/90/100/t and we also downgrade our LT forecast to US$110/t.
Both price outlooks are 20% too high but the themes are right on the money.
