Coal Deals Start To Flow As The Price Recovery Accelerates
Jun 10, 2016 @ 03:02 AM
Coal Deals Start To Flow As The Price Recovery Accelerates
It has to be the worlds least loved commodity but if thats the case then why is the price of coal rising and, more to the point, why is someone about to spend more than $1 billion buying a suite of coal mines?
The answer is that loved, or unloved, the world simply cannot function without coal which is why the price of thermal coal which is used to generate electricity has risen by up to 15% since April, and why there are four bidders left in the race for two metallurgical, or steel-making, coal mines in Australia.
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Life in Coal
Whats happening in the thermal coal market has started to attract the attention of some of the worlds leading investment banks with Morgan Stanley noting yesterday: Theres life in thermal coal, and Macquarie Bank chiming in with a comment that: Thermal coal on the counter attack.
Because thermal coal is sold according to its heating value there is not a single price but as a guide the price for mid-ranking material shipped out of the Australian port of Newcastle is treated as a benchmark and over the past eight weeks it has risen from $50 a ton to $56/t, and higher in some cases.