RIV riversdale mining limited

south african coal price to hit 200 dollars

  1. 1,015 Posts.
    S.Africa coal price to hit unprecedented $200/tonne FOB
    LONDON

    (Reuters) - South African coal prices are within days of reaching unprecedented levels of $200.00 a tonne free-on-board Richards Bay - against producers' cash costs of around $30.00 - producers, traders and consumers said.
    "The market is extremely tight, prices are rising everywhere. Newcastle (Australian) prices have already traded above $200.00 a tonne FOB today and there can't be that much of a gap between Newcastle and Richards Bay prices," one trader said.

    Traders fairly new to the coal market are taking the current upward leaps of $5.00-$10.00 with each trade in their stride, but South African producers endured many years in which they struggled to sell in an oversupplied market.

    The rise of export coal prices to levels comfortably above producers' cash costs is a relatively new phenomenon. In May 2007 Richards Bay prices were hovering either side of $60.00 a tonne FOB and most producers sold at least some of their output forward fixed at those prices.

    "Looking back, nobody was predicting, nobody could have predicted, that prices would rise this much," one producer source said.

    Coal exports are a vital source of revenue for mineral-rich South Africa. Exports have been around 63 million tonnes a year of 6,000kc/kg standard coal for the past few years out of a capacity of 73 million tonnes at Richards Bay Coal Terminal.

    The Phase V expansion is intended to enable exports to rise by a further 20 million tonnes.

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    PS: Mining stocks rise in European market.

 
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