Domestic coal market in ‘chaos’ as demand soars
Eskom and local customers are competing with global importers, which is likely to keep export prices high
The domestic coal market was in "chaos", commentators said this week, as strong demand from Eskom and industrial customers competed with unexpected global demand. For several years, analysts have warned the price of coal used in power stations is declining since environmental pressures are choking off demand. But there is little sign of that yet. Short-term factors supporting coal demand include India’s increased imports since falling output from hydro, wind and nuclear power have coincided with a seasonal decline in coal mining. India is also considering a nationwide ban on burning petcoke, a highly polluting fuel, which would have to be replaced by imported coal. Analysts said this was likely to benefit South African coal exporters, for whom India is a well-established market. China was also expected to increase thermal coal imports throughout its 2017-18 winter since its plan to replace coal with gas for household heating had encountered gas shortages. Xavier Prevost of XMP Consu...
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