The Economist Guide to Commodities 2nd Edition: Producers, Players and Prices; Markets, Consumers and Trends by Caroline Bain

Author:Caroline Bain [Bain, Caroline]
Language: eng
Format: epub
ISBN: 9781782837466
Google: RwkwEAAAQBAJ
Amazon: B095V8B7WG
Published: 2021-12-30T00:00:00+00:00

Price trends

Thermal coal prices rose strongly during the 2000s in response to rapid growth in demand. Years of underinvestment as a result of low prevailing prices meant that the market struggled to meet the rise in consumption, particularly when China entered the market for the first time in 2007. However, prices subsequently went into decline after 2010 (see Figure 3.2), as the market recorded large surpluses and growth in global consumption slowed. At the same time, US natural gas production soared and liquefied natural gas exports were growing rapidly (initially from Australia but subsequently from the United States), all of which led to lower prices for thermal coal’s main competitor. The coal market briefly dipped into a deficit in 2016 – on the back of a rebound in economic activity in China – which gave a lift to prices, but they started falling again in 2018. It was a similar story in 2020; the rapid and strong recovery from the pandemic in China gave a renewed impetus to global coal prices.

FIGURE 3.2 Coal prices US$ per tonne

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