Coal news and updates

Coal prices likely to remain soft: Trader

January 15: Prices of coal in international markets are likely to see a stable-to-negative trend in the next couple of quarters, an official from a leading coal trading company based out of New Delhi said.

“Prices in the next couple of quarters may be stable to negative. However, later on in the year, may be in the third or fourth quarter, prices will start a slow upward movement,” the trader told ICMW over phone.

He highlighted that many traders are now adopting a wait-and-watch mode as there are risks involved, including volatility in terms of currency and oil.

According to data available with ICMW, prices of South African coal declined by nearly 25% in 2014 while prices for the Australian variety fell by almost 24% from their 2013 levels. Indonesian coal prices, however, declined by 7% on a year-on-year basis in 2014.

The trader said the decline in prices was across the board and the rate of fall was almost the same. However, due to geographical proximity to India and China from Indonesia, the country (Indonesia) was able to command some sort of a premium.

Moreover, the Indonesian government also restricts coal pricing, he said.

“The major miners are not allowed to reduce prices in line with the overall market trend. So it can be said that because of the geographical proximity to India and China as well the regulatory environment, prices of Indonesian coal has not declined as much as they should have,” he said.