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New UserNSW coal exports increase as expected, but more price falls likely due to low oil price
20 Jan 2015
Oil and coal are both used to generate energy and some analysts believe large manufacturers will switch to oil now the price has halved.
Coal analyst Jeff Raye, from ITS Global, said he expected to see a further softening of the coal price as a result.
"Once the price of one starts to get out of alignment with the other, the people who can change easily, and they are often the manufacturers and other producers who use energy for heating and steam, they will switch over."
New export data shows that global demand for New South Wales coal has increased significantly over the last financial year, despite predictions that it would diminish.
Demand from Korea rose more than 8 per cent and Taiwan 14 per cent, while exports to China increased 22 per cent, cementing that market as the second largest behind Japan.
Mr Raye said the shift towards China had been dramatic.
"Seven years ago, 1 per cent of coal exports were going to China. Today it's nearly a quarter and China is the second largest destination for coal after Japan."
He said Asia was where the growth is for NSW coal exports.
"China, India and South East Asia are going to provide something like 93 per cent of the forecast increase in coal demand over the next five years, according to the IEA (International Energy Agency)."
Coal remains the state's most valuable export commodity.
And Mr Raye said, based on IEA figures, that demand would continue to grow for at least the next five years.
Source: http://www.abc.net.au/