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
Updated to Q3 2014
The start of summer has revived the bearish sentiment for coal prices in the Atlantic basin with European utilities already reducing their coal burn as electricity demand falls. Falling gas prices are likely to further reduce coal demand with gas-fired generation already increasing its share in overall electricity production mix.
With no supply disruptions in any of the major coal producing regions, the coal market remains fundamentally oversupplied, making it unlikely that the bullish sentiment would return to the market in the next three months as the weather also gets warmer.
The Chinese domestic coal market is also bearish and demand is likely to remain low. In absence of major supply disruptions, South African and Australian high-quality coal markets could fall further in order to entice Asian buyers.
While production cuts may eventually provide a lift to coal prices, continuous global economic struggles are likely to keep them subdued for the foreseeable future. The downside is limited, however, as current prices provide only the slimmest of profit margins for coal producers around the world.
News & analysis
Coal news & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
Over 25 years of reporting on key chemicals markets, including Coal, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.
Coal Swaps Daily Methodology
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.