Coal: A slow-burning issue
Coal prices are higher now than they were previously, but unpredictable demand from the East will affect producers’ outlook
SA’s coal producers could have reason to hope again after five years of falling global prices that strengthened Eskom’s hand in negotiations over supply contracts and persuaded environmentalists to declare coal’s demise was in sight. Coal prices are firmer, but whether they continue rising or fall this year depends largely on the direction of Indian and Chinese demand, speakers at IHS Markit’s SA Coal Export Conference 2017 said last week. That demand is difficult to predict. Current export thermal coal prices through Richards Bay Coal Terminal (RBCT) are about US$88/t for the highest grade, from below $50/t a year ago. RBCT CEO Alan Waller says that though the terminal’s exports were 3.7% lower last year than in 2015, at 72.6Mt, volumes surged in the fourth quarter. Xavier Prevost, XMP Consulting senior coal analyst, says SA produced 253.7Mt of coal last year, about 1.4Mt less than in 2015, and generated R47.4bn from exports, less than the R60.8bn generated from local sales, revers...
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