Article Date: 15/05/2009
The prospects for the Australian coal industry remains hoist to the fortunes of the Chinese economy, with an assist from Japan, South Korea, Taiwan and India.
Even though China’s recovery is fitful, demands for coal from the steel, power and cement industries remains low.
But that’s not only the case in China; in other major markets in the region the same situation can be found: Japan is moribund, South Korea sluggish, Taiwan the same.
That’s why more Australian iron ore producers are selling unwanted product on the spot market and why coal prices have been slashed for the current contract year (along with iron ore).
The most recent quarterly result for one of the country’s major coal producers and exporters illustrates the fading boom and the developing slump.
Hard coking coal prices are falling from around $US300 a tonne to around $US128, while thermal coal prices have fallen from $US125 tonne in the year to March, 2009, to average around $US75 a tonne for the current shipping year.
Peabody Australia is part of the world’s biggest privately-owned coal group, Peabody Energy, which late yesterday revealed plans to take a 15% stake in small local producer, White Energy, and entered into a joint venture in the US for a coal upgrading plant…