Coal awaits boost from China as US power companies cut use
The average price of the benchmark Australian thermal coal dipped for a third straight month in October to $88.29 per tonne – compared with $127.92 a tonne a year earlier – and has since dropped to $84.45.
The price has crashed by more than 56% since scaling an all-time-high of $192.86 in July 2008, thanks to a supply glut and poor demand from top energy users such as the US and China.
Similarly, natural gas prices have plunged with expanded production from new fields, making it increasingly affordable for power plants as an alternative fuel. The price of natural gas has slumped over the years by more than 72% to $135.84 per thousand cubic metres now since hitting a record $490.82 per thousand cubic metres in October 2005.
Rio Tinto recently said its Australian Coal & Allied Industries unit, which produces 30 million tonnes of coal annually, would trim jobs mainly due to a sharp drop in coal prices. BHP Billiton, the world's biggest exporter of metallurgical coal used in steel making, last month warned that cost pressures were making it hard to justify
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