Coal prices are peaking

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by Chris Becker

Macquarie are out with a research note that won’t make the carbonised troglodytes in the Liberal Party happy, suggesting that coal prices have peaked after recently reaching $90 per tonne. They put the recent rally down to seasonality, not a new macro trend:

While Chinese coal supply has been recovering back to levels not seen since late 2015, demand continues to outpace supply. Recently introduced port restrictions appear to be having little impact on the appetite for coal imports among Chinese buyers, and given Chinese domestic prices are above the government target range, we would expect imports to be allowed to continue unchecked near term until coal prices ease again once power demand passes its seasonally strong period.

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