Asian coal volumes may rise, price may not: Clyde Russell
Coal producers supplying Asia are likely to have a busy year, but that increase in demand won't necessarily translate into much higher prices.
The price of spot coal at Australia's Newcastle port , the regional benchmark, recovered 14 percent from a near three-year low in the last two months of the year to end 2012 at $92.25 a tonne. But this was still down 20 percent over the whole of 2012, making coal one of the worst performing commodities in a year during which the International Energy Agency predicted it would take over from oil as the world's top fuel by 2017. Coal's poor performance belied a 27 percent jump in China's imports in the first 11 months of the year, and a similar 26.8 percent gain in India's purchases in the first eight months of the fiscal year that started in April.
But global supplies of the fuel are plentiful, with Barclays estimating that an additional 82 tonnes, or 10.5 percent, made its way onto world markets in 2012.
An additional 32 million tonnes may be available in 2013, Barclays said in a report dated Dec. 21. But as growth in supply this year will be less than half of what it was in 2012, there is potential for the seaborne coal market to tighten a bit, especially if demand in Asia's two growth centres for the fuel continues at the same pace.
Assuming China's growth rate for the first 11 months is maintained in December, it will have imported about 49 million
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