If you listened to the daily bleating of Australia’s parliamentary coal maniacs, you could be forgiven for concluding that the sector was on its last legs. Nothing could be further from the truth today as Australia is being flooded by coal cash at a rate that has not happened since the boom of 2008. The FT kicks us off:
Thermal coal, tagged the least-loved major commodity by analysts, is defying sceptics, with prices rising to the highest level since 2012 thanks to strong Asian demand. High-grade Australian thermal coal, the benchmark for the vast Asia market, was quoted at $112.60 a tonne on Monday by Argus Media. The fuel, which is burnt in power stations to generate electricity, has now jumped 130 per cent from its 2016 lows, boosting the profits of big producers such as Glencore and Peabody. The price of South African thermal coal has also hit a six-year high as consumers in Asia scramble for supplies.
Demand from India, Japan and South Korea has been robust in the first five months of the year, while an early summer heatwave has lifted imports into China despite Beijing’s efforts to keep a lid on domestic coal prices.
The full text of this article is available to MacroBusiness subscribers
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
