It’s Time to Invest in Coal
By Marin Katusa, Casey Research Energy Team
Coal prices are surging ahead even as most other commodities pull back, spurred on by expectations
that metallurgical and thermal coal production will again fail to meet rising global...
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It’s Time to Invest in Coal
By Marin Katusa, Casey Research Energy Team
Coal prices are surging ahead even as most other commodities pull back, spurred on by expectations
that metallurgical and thermal coal production will again fail to meet rising global demand this year.
The
result? Record profits for major coal producers like Xstrata, a surge in acquisitions from coal-hungry
India, Chinese electricity shortages, and a raging carbon tax debate in Australia amid record investments
in that country’s coal-heavy mining sector.
The price spikes in the second half of 2008, which were completely unsustainable and disappeared
rapidly in the recession, distort the picture.
So instead, imagine the above graph without those peaks.
What you get is an almost sustained ascent in the spot prices of thermal and metallurgical coal over the
last four years.
Metallurgical coal, which is used to make steel and is also known as coking coal, has
almost doubled in price, climbing from just above US$80
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