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  • 9 months later...
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Yes, the coal consumption has declined and the major factor responsible is said to be low natural gas prices as it is more economical. But the forecasts are also suggesting that ever rising demand for electricity and rise in the natural gas prices may increase the coal consumption.


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I don't think that people will stop using coal anytime soon, it's just that it is likely the readily available supply will be more than enough to meet demand and so prices will be less than encouraging. But I know even less about the dynamics of coal than I do about a couple of commodities that I have attempted to follow over the years so what would I know.


Just on coal I see Four Corners on ABC tv next Monday night, 15 June, is to do with, I think, government support for the proposed Adani Carmichael project. Here's a likely taster of the line to be followed, from Michael West in the Fairfax papers.




I'm certainly no greenie - I just would like to make a quid from investing from time to time - but I suspect that the idiot government we now have in Canberra is probably idiot enough to go all-in on this project. Bloody hopeless I'm afraid.

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  • 6 months later...

A welcome return to active blogging imo: Gregor MacDonald was a writer in the energy space that I used to follow closely, he normally proffered thoughtful nuanced ideas and predictions about the energy sector. However he went off to write gated material but now it seems he is back in the free-to-air arena.


In this article he suggests that yes what the local conservatives are saying is true, that coal will continue to be a key source of energy in the world for some time to come, but no, Australia's export coal sector does not have much prospect of returning to its glory days.




At macrobusiness their consistent line regarding the Adani mine proposal is that it makes no economic sense given that India is fully intent on relying on coal produced domestically and that the only opportunity for coal produced at the Adani mine is to take over markets currently being provided for by existing more-efficient Qld operators.


On another front I see someone suggested that the industrial revolution has officially ended in the UK, with the closure of the last underground coal mine there (???). Amazing that back in the 1960's there was about about half a million "deep" coal miners in the UK and now there's none.





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Thanks for this link; it makes interesting reading away from the simple / simplistic. .... Which can be summarized as

- little growth but

- it's all about the margins

- India is the big surprise


Other challenges - no differentiation between thermal and metallurgical. And unearthing to whom and where the subsidies go is a big issue. (For each form of energy)


Alarming is the impracticality of some blanket oppositionists. Now the anti-coal crowd scent a victory, the goalposts shift to all fossil fuels. I for one aren't ready to fly around the world to my activists gabfest in a plane running on biofuel. And I wonder if they know where plastics come from?

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  • 6 months later...
The macro message is that thermal coal's share of global power generation will decline from just over 40 per cent to around 30 per cent over the next two decades. But absolute demand for the stuff will increase by 10-15 per cent.


"Against the backdrop of greater uncertainty in the outlook for thermal coal, we [bHP] are confident that base demand in emerging economies will remain resilient for decades and our higher-quality coal positions us well in an increasingly carbon-constrained world.''


Similarly, with coking coal, there's a supply gap emerging from 2022, with coastal Chinese blast furnaces hungry for the quality seaborne stuff.


Currently, coking coal fetches around $US80/t and thermal coal $US50/t.

BHP minerals boss Mike Henry
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  • 3 months later...

Australian coking coal spot prices have surged 155 per cent since the start of June to a four-year high of $US213 per tonne as

- China cracked down on mining overcapacity

- at the same time their government stimulus fired the housing market, while

- rain and derailments hit Australian supply.

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  • 4 weeks later...

Coking coal has moved from $US90 a tonne in March and holding well over $US200. The Chinese government forced its domestic coalmining industry to cut the number of days mines can work in a year from 330 to 276.

That classic example of command-economy direction had the desired effect of cutting coal output, partly as an environmental clean-up measure and partly to boost the coal price for loss-making miners.


But it also turned out to be a policy that worked too well, with shortages in the Chinese market for hard coking coal (used to make steel) and thermal coal (used to generate electricity) rising much further than the central government expected.


This has forced coal users into the international market, with Australia a first port of call, especially for hard coking coal (an Australian specialty).



Whitehaven Coal WHC - from 35c in January to around $3.15, now $2.95.

New Hope Corporation NHC - from $1.25 to a 12-month high of $2.13 last week before ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚­easing back to $1.90.

Stanmore SMR - from 12c to 84c before easing back to 70c,

Atrum ATU - from 36c to $1.05 before settling at 75c.

.......and has helped S32 (Illawarra) and some BHP Bowen production , as well

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