The drastic decline of the market for coal

The price of coal price fell by almost a third last year as the world turns its back on the dirty fuel

Australia’s coal industry has been hardest hit

“Coal’s fortunes look bleak”, says Jeremy Hodges on Bloomberg. The fuel’s price fell by almost a third last year to around $62 per tonne with little prospect of a pick-up in 2020. A combination of falling gas prices, “ever-cheaper wind and solar power” and carbon- emissions reduction policies are driving a “drastic” decline in generators that burn coal. Last spring the UK went for a full week without coal power for the first time since the industrial revolution. 

Bulls point to new coal-fired power stations coming online in Asia, say Joe Wallace and David Hodari in The Wall Street Journal. China accounts for about half of global coal demand. Yet Beijing is taking a protectionist turn as it wants to preserve “the domestic coal industry because it’s the source of employment for so many people”, says Manjot Singh of CRU Group. It is importing less coal, which has also tempered global demand. 

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Australia’s coal industry has been hardest hit, reports Adam Morton in The Guardian. China’s imposition of what amounted to “an unannounced ban” on the country’s coal last year means that the industry’s export earnings are forecast to fall by more than a quarter over the two years from 2018. Western markets are not taking up the slack. Demand for coal-fired power fell 23% in Europe and 14% in the US during the first nine months of 2019. 

Advertisement

Most Popular

Visit/investments/stocks-and-shares/600863/sirius-minerals-anglo-american-takeover
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Visit/currencies/600842/eur-usd-euro-slide-against-us-dollar
Currencies

The euro’s slide against the US dollar looks set to continue

The euro has been in a bear market against the US dollar for two years now. And on a broader scale since 2008. A decline like that is telling us somet…
19 Feb 2020
Visit/economy/uk-economy/600862/britains-economy-might-spring-a-surprise-on-the-doomsayers-this-year
UK Economy

Britain’s economy might spring a surprise on the doomsayers this year

The UK economy is looking pretty good – we’re more at risk of a boom than a bust, says John Stepek. Here’s why, and what it means for your portfolio.
20 Feb 2020
Visit/investments/commodities/600729/the-rare-earth-metal-that-wont-be-a-secret-for-long
Sponsored

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020