TOP-QUALITY Newcastle thermal coal is again bringing more than $US400 ($578) a tonne, with analysts expecting prices to stay high this year in the face of increasing demand and environmentally restricted supply.
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Despite the global political hype surrounding emissions reduction, a range of expert opinions have recently forecast continued increases in coal consumption, rather than the decreases implicit in the drive to renewable energy.
This week's edition of the Australian Coal Report has a January 6 quote of $US410.50 a tonne for the best Newcastle coal, with lower-value high-ash coal bringing $US129.70 ($187.50) a tonne.
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Newcastle coal spent most of last year at $US400 a tonne or above, with sudden dips to $US270 in March and $US320 in November, followed by quick recoveries.
Volumes were down last year, but earnings for the industry remain at record levels.
The latest rebound - and predictions of sustained high prices - is in contrast with federal budget predictions, which were framed around a return to a price of $US60 a tonne, as we reported in October.
The International Energy Agency (IEA) said last month that global coal use was on track to top eight billion tonnes last year, eclipsing the previous record set in 2013 - and accounting for 36 per cent of global energy use.
Australia is widely regarded as responsible for one per cent of global CO2 emissions - a figure that rises to four per cent when its coal exports (accounted for by other countries) are included.
In its December report, the IEA said: "Developments in China, the world's largest coal consumer, will have the biggest impact on global coal demand in the coming years, but India will also be significant."
Fossil fuels without emissions abatement still account for more than 60 per cent of the world's electricity, according to the IEA - a share that it says must drop to 26 per cent by 2030 "to be consistent with the net zero emissions by 2050 scenario".
The IEA says China accounted for 53 per cent of global coal consumption last year, and the Australian Coal Report says an unofficial end to the Chinese ban on Australian coal imports will play out over the coming months.
It said supplies of coal from Newcastle remained "extremely tight".
"In addition, many shippers have re-routed cargoes to other destinations such as Europe, Southeast Asia, and India since China's import ban in 2020, reducing cargo availability for potential Chinese buyers," ACR said.
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Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
