For around a month, the European coal market appeared to have calmed down following the massive price rally earlier in the year. Now however, it looks like the market has started rising again, and at Tuesday’s close, a ton of coal for delivery in 2019 cost 90.79 USD. It is the first time since the summer of 2014, that the price on a ton of coal breaks above 90 USD.
As often before, when there are sudden fluctuations on the European coal markets, it is because of events in China. The Chinese are currently experiencing a heat wave, which has led to increased demand for electricity. Even though it is China’s ambition to diminish the role of coal power, the country has still had to increase the coal plants’ production to cover the current demand.
Chinas has increased coal import from other countries to cover demand, and since China by far is the biggest coal consumer in the world, it is something that affects the rest of the world when the Chinese make a decision like that. The increased demand in China coincides with new strike threats from the miners in South Africa. If the South African coal sector should be struck by a strike, it would affect the coal market globally, and the market has edged up due to the insecurity from the strike risk. It is however worth mentioning, the we have seen strike threats from the South African miners many times before, where it has been avoided after all.
The European coal prices have risen throughout the week due to the changed circumstances in China and South Africa. Further gains could be on the way, should the weather conditions in China not change.
Sopiva riskienhallintastrategia on kannattava sijoitus
For the third week in a row there were losses in the immediate Nordic forward prices. There are plenty of downsides in the market, following a long, dry and warm summer that has resulted in price climbs.