Electricity, Coal, Oil, Gas, Nuclear, Solar, Wind, Unconventional Fuels and Pollution in China
Thursday, August 15, 2013
Australian coal industry in final stage of grief
Australian coal industry in final stage of grief - Reuters Clyde Russel | ...More worrying for producers is that the Newcastle price is now 44 per cent below its post-2008 recession high of $US136.30 a tonne, struck in January 2011. ...The problem for Australian miners is that at these prices many of them are struggling just to break even, and virtually no new project can proceed as the development costs exceed the potential revenue that can be earned. ... While longer term coal demand is slated to rise strongly on the back of new coal-fired power plants in China, India and elsewhere in Asia, for the foreseeable future coal prices are likely to remain relatively stagnant in real terms. This is because the cost of seaborne coal in Asia is largely being set by the cost of production in China, where imports meet around 6 per cent of total demand despite the nation being the world's largest importer. China's marginal cost of production for thermal coal is around $US80-$US100 a tonne, according to CLSA analyst Ian Roper. This likely puts a cap on how high coal prices can rise, as Roper points out that the Chinese are opportunistic importers, buying from overseas when the cost is below that of domestic supplies, but pulling back when it's cheaper to buy locally.