Coal Prices, markets & analysis
Driven by the growth of the emerging markets of China and India, coal is set to surpass oil as the world’s top fuel source by 2017. As a result, access to independent and robust coal pricing information will be even more important for coal professionals over the coming years.
At ICIS, our global coal market reporters, editors and analysts closely examine this fast growing industry, giving them the ability to provide insightful, independent reports.
Our suite of reports and studies offers readers daily coal price assessments and indices, analysis on price drivers as well as in-depth analysis of one of the world’s biggest coal market, China.
Coal Overview Transcript
After a turbulent start to 2011 which saw China emerge as a major net importer of coal, global fuel markets rallied in response to the accident at the Japanese nuclear plant.
Ample supply and continuous worries over the global financial crisis now weigh heavily on major coal hubs. European recession fears are spilling in to China and other Asian countries.
This combination of ample supply and faltering economies mean that coal demand projections are well below anticipated levels. At the same time, the European market seems to have matured.
The traditional suppliers to Europe, such as Columbia, the US and Russia are now fixing their sights on Chinese and Indian markets as new sources of revenue.
Once again the focus of the coal market is shifting, the pace of change accelerating and the need for information increasing rapidly.
ICIS is well position to supply that information to help make important trading decisions.
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Coal: Market overview
Oversupply in the international coal markets showed no signs of easing in 2013, as prices continued to come under pressure from a global glut.
Some signs point to a reining in of US coal supply into Europe after record exports from the country in 2012. However, the international market remains saturated, with Colombian coal, which is traditionally sold to the US, weighing on global prices.
High profitability of coal-fired generation and the resultant strong coal demand in Europe has done little to support global coal prices because of the large amount of coal available and softer Chinese demand.
Chinese domestic coal prices have started to drop to five-year lows during the third quarter, adding more bearish pressure to international prices.
With demand low in Asia, many producers in the US, Russia and Australia have already had to scale down production, as coal prices in the international market no longer meet their production costs.
However, while production cuts may eventually boost coal prices, continued global economic struggles and oversupply are likely to keep coal prices subdued for the foreseeable future.
Updated to late-August 2013
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Coal news & analysis
Coal was generated in the Carboniferous Period starting around 360 million to 290 million years ago through the build up of silt and other sediments. Tectonic movements in the earth’s crust buried swamps and peat bogs to great depths, exposing the materials to a change in temperature and pressure.
Coal’s key characteristics are calorific value, its moister content, its ash content, its volatile content and its sulphur content although these can vary greatly, depending on the area where it is mined.
Coal is used primarily for electricity generation and steel manufacturing. The type of coal used for electricity generation is usually referred to as steam or thermal coal, while coal used for steel manufacturing is metallurgical coal or coking coal. The main difference between the two is in the calorific value, with typical calorific value of steam coal at 6,000kCal/kg.
Lignite or brown coal is also often used for electricity production but its calorific value is usually much lower than that of thermal coal. Lignite is usually produced and used domestically and any international trade is negligible.
Coal generates around 40% of global electricity production.