Coal Gets No Relief as Aussie Slide Deepens Glut: Energy Markets
Aug. 23 (Bloomberg) -- Coal miners are taking advantage of the tumbling Australian dollar, boosting production even as a glut of the power-station fuel drives prices to the lowest in almost four years.
While the cost of shipments from the port of Newcastle, which are priced in U.S. currency, has dropped as much as 16 percent this year to $76.10 a metric ton, the lowest since 2009, prices fell only 5 percent in Australian dollar terms, according to data compiled by Bloomberg. That’s helping buoy revenue for producers, encouraging them to increase supply, according to CIMB Group Holdings Bhd and Australia & New Zealand Banking Group Ltd.
‘Swimming in Coal’
Goldman Sachs lowered its 2013 price forecast by 7.6 percent last month, while Citigroup reduced its estimate by 6.7 percent. The power-station fuel at Newcastle may average $85 a ton this year, according to the median estimate of five banks in a Bloomberg News survey. Prices have averaged $85.87 to date, according to McCloskey.
“We’re swimming in coal and the situation in the short term looks to persist,” said Daniel Morgan, an analyst at UBS in Sydney. “Real production cuts, what we haven’t seen yet, must be looming.”
--from Washington Post today
the coal supercycle won't begin for another 18 months. Accumulate and hold. Who's with me?