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| Coal prices skyrocket amid rising demand & soaring gas prices | Coal prices skyrocket amid rising demand & soaring gas prices |
| (2 months later) | |
| Asian benchmark Australian thermal coal at Newcastle Port has seen an unprecedented 106% gain in prices in 2021. In stark contrast, international oil benchmark Brent crude gained only 33% this year. | Asian benchmark Australian thermal coal at Newcastle Port has seen an unprecedented 106% gain in prices in 2021. In stark contrast, international oil benchmark Brent crude gained only 33% this year. |
| The price of coal soared to more than $166 per metric ton, according to the latest report by market data provider Argus. The Newcastle weekly index, which stood at $46.18 in September 2020, now stands at its all-time high of $195.20 from July 2008. | The price of coal soared to more than $166 per metric ton, according to the latest report by market data provider Argus. The Newcastle weekly index, which stood at $46.18 in September 2020, now stands at its all-time high of $195.20 from July 2008. |
| The Richards Bay index, Newcastle’s South African equivalent, also jumped more than 55% this year, closing at $137.06 per metric ton last week. | The Richards Bay index, Newcastle’s South African equivalent, also jumped more than 55% this year, closing at $137.06 per metric ton last week. |
| According to Yulia Buchneva, Fitch ratings agency’s director in natural resources, thermal coal remains one of the main global energy sources with an over 35% share in power generation worldwide. | According to Yulia Buchneva, Fitch ratings agency’s director in natural resources, thermal coal remains one of the main global energy sources with an over 35% share in power generation worldwide. |
| “We expect that the share of coal in energy generation will decline driven by the energy transition agenda, however this will have a rather longer-term impact on the market. In the medium-term, demand for coal in emerging markets with less strict environmental agenda, in particular in India, Pakistan, and Vietnam, where coal-fired power dominates generation, is expected to rise,” Buchneva told CNBC, noting that Europe and the US represent a mere 10% of worldwide coal demand. | “We expect that the share of coal in energy generation will decline driven by the energy transition agenda, however this will have a rather longer-term impact on the market. In the medium-term, demand for coal in emerging markets with less strict environmental agenda, in particular in India, Pakistan, and Vietnam, where coal-fired power dominates generation, is expected to rise,” Buchneva told CNBC, noting that Europe and the US represent a mere 10% of worldwide coal demand. |
| “The current high thermal coal prices have decoupled from costs and are therefore not sustainable. We expect that prices will normalize during the remainder of the year,” she added. | “The current high thermal coal prices have decoupled from costs and are therefore not sustainable. We expect that prices will normalize during the remainder of the year,” she added. |
| Fitch Ratings expects the price of Australian coal to drop toward $81 by year’s end. | Fitch Ratings expects the price of Australian coal to drop toward $81 by year’s end. |
| Thermal coal is burned to generate electricity. It is the most carbon-intensive fossil fuel, with a high level of emissions. Argus analysts claim coal prices were impacted by high electricity demand and a surge in global gas prices due to the Covid-19 pandemic, combined with unseasonably low gas storages in Europe and low gas imports. | Thermal coal is burned to generate electricity. It is the most carbon-intensive fossil fuel, with a high level of emissions. Argus analysts claim coal prices were impacted by high electricity demand and a surge in global gas prices due to the Covid-19 pandemic, combined with unseasonably low gas storages in Europe and low gas imports. |
| For more stories on economy & finance visit RT's business section | For more stories on economy & finance visit RT's business section |