A coal quiz

Coal Export data, selected markets from RBA

The answer to the first ques­tion may sur­prise you. Click the image.

Coal export prices

The answer to the sec­ond is one of those ‘gotchas’ that char­ac­ter­ize bulk com­mod­i­ty mar­kets. Big pro­duc­ers with a vari­able local demand can play hav­oc (fair­ly or unfair­ly) with the world mar­ket price. That’s true in most agri­cul­tur­al com­modi­ties, too. Of course the impact on the ‘spot’ mar­ket price will not trans­late direct­ly to the con­tract price for for­ward sup­ply.

And the headache? It has noth­ing to do with ‘glob­al warm­ing’. Eco­nom­ic growth in our main export mar­ket for both cok­ing and ther­mal coal has slumped from noth­ing to less-than-noth­ing. Mean­while, the down­turn in domes­tic demand in the world’s biggest pro­duc­er of both kinds of coal will see mar­ket sup­ply of coal rise and the prices plum­met.

If you’re hop­ing for rapid devel­op­ment of ‘car­bon seques­tra­tion’ of car­bon emis­sions from coal, you’re bound to be dis­ap­point­ed.

The infor­ma­tion about coal exports and the images come from an arti­cle by Dan Andrews in the Jan­u­ary 2009 Reserve Bank Bul­letin.

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