POWER station coal prices have risen to the point where the highest-quality Newcastle export thermal coal is selling on the spot market for single cargoes at $US88.75 a tonne, up from $US66.06 a tonne this time last year.
Coal is traded in $US, and a strengthening Australian dollar means the 34 per cent price increase falls back to 17 per cent in domestic currency terms.
The Australian Coal Report says the rally in prices is not unique to Australian thermal coal but part of a broader surge in global energy prices.
Some of the price rise is attributed to NSW coal production cuts last year in an effort to lift prices by reducing supply.
As well, Newcastle Coal Infrastructure Group has confirmed that one of its two shiploaders is still out of service after being damaged by high winds in a storm on November 16.
Various countries have announced net-zero emissions targets and put political limits on coal consumption, but the ACR reports that a cold northern winter has kept coal demand high in the absence of sufficient alternative electricity sources.
Earlier this month it quoted a Japanese coal trader as saying Japanese coal-fired power stations were running at full capacity.
"We will see the same price fluctuations we saw in 2018-2019, when [Newcastle] prices went to $US110 to $US120," ACR said.
On Wednesday, BHP announced it had written down the value of its Mount Arthur mine by between $US1.15 billion ($1.5 billion) and $US1.25 billion ($1.6 billion), giving it a book value of $US250m ($320m) to $US350m ($450m).
Some have interpreted this as reflecting a systemic decline of coal, while others say it relates to BHP's plans to sell the Muswellbrook region mine.
The ACR said the write-down "improved the chances" of BHP selling the mine because "the non-
transferability of tax losses was seen as a potential hurdle" to the sale, and "an impairment [on BHP's books] could ease the sale process".
Also in the past weeks, coal companies Whitehaven and Yancoal both recorded increased thermal coal sales, with the Chinese ban on Australian coal apparently having little impact, with Australian producers able to sell to other Asian countries.
Tim Buckley of the Institute of Energy Economics and Financial Analysis (IEEFA) said yesterday that coal was again making profits but the price rises were "near-term noise reflective of the normal, cyclical, nature of the industry".
"The growing structural headwinds to coal have increased profoundly, with net-zero emissions targets and the US return to the Paris Agreement," Dr Buckley said.
"Commitments by China, Japan and South Korea to net zero emissions targets mid century are the real story," Dr Buckley said.
"The election of President Biden and the resulting US return to the Paris Agreement only adds momentum to the global decarbonisation push.
"Global finance is accelerating its divestment of existing coal exposures, and bans on new coal lending, investing and insurance.
"That is a pretty clear long term terminal picture.
"Solar [prices] in India are now below . . . the marginal fuel cost of an existing domestic coal fired power plant.
"That is a terminal event, given solar deflation of over 10 per cent annually wont just stop now.
"Higher prices for seaborne coal will just accelerate coal's loss of competitiveness."
Dr Buckley said China's solar installations in 2020 were almost double market expectations, while Vietnam added nine gigawatts of rooftop solar, which was "entirely unexpected and unprecedented".
He said a number of Asian countries were ended subsidised "export credit agency" financing of coal power, showing that momentum towards domestic renewable energy was shifting even faster than many on his side of the argument had expected.
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