2011 coal trends and q4 outlook

http://resourceinvestingnews.com/21824-2011-coal-trends-and-q4-outlook.html

...Thermal Coal

Chinese thermal prices ? a key price benchmark ? are expected to recede as well, with the hot summer months winding down and stockpiles are beginning to be delivered to ports and power stations. Further, monetary tightening in China has also provided an environment that is no longer able to support higher thermal prices from more costly Australian producers, as Chinese have shifted some contracts to South African producers.

Thermal contract bids were pegged in the area of US $113-114/mt on 5,500 kcal/kg and US $116/mt for 6,000 kcal/kg NAR thermal coal from Richards Bay out of South Africa in late July. However, more recent bids by Moroccan generator Jorf Lasfar Energy Co (JLEC) were quoted in the region of US $124/mt for a 120,000 mt shipment of 5,800 kcal/kg thermal in October and November.

With all these sliding price targets, concerns have been raised over a potential peak within coal markets and commodities more broadly. Despite these potentially valid considerations, coal is a growing component of the international economy, and looks poised to be for some time. After thermal coal hit 40 year highs as it made up 29.6 percent of the world energy basket in 2010, continued growth looks likely to remain resistant to any remarkable falling off of demand forecasts.