The price for hard coking coal has plummeted US$32 a tonne in the last week - the biggest weekly drop in years - and the third consecutive weekly fall. Photo / NZPA
The price for hard coking coal has plummeted US$32 a tonne in the last week - the biggest weekly drop in years - and the third consecutive weekly fall. Photo / NZPA
Experts who warned three months ago that the skyrocketing international coal price was unsustainable may be patting themselves on the back.
The price for hard coking coal has plummeted US$32 a tonne in the last week - the biggest weekly drop in years - and the third consecutive weekly fall.
The price today was US$265/tonne, compared to US$297/tonne a week ago. It has plunged US$45/tonne since peaking at US$310/tonne last month.
The slide comes as Bathurst Resources considers reopening its Denniston Escarpment Mine and Phoenix Coal, a joint venture between Bathurst and Talley's Group, prepares to buy Solid Energy's Stockton export coal mine and Waikato domestic-supply coal mines Rotowaro and Maramarua.
Phoenix has agreed to pay $46 million cash, plus a contingent payment of up to $50m tied to coal sales revenue from Stockton.
The contingent payment only clicks in when coal prices are above $150 (US$108)/tonne.
The price rally began in June, after China cut its coal production. By September the price had almost doubled to US$157.50/tonne, but experts were pessimistic.
"This is not sustainable at all. Other mines will start opening very soon," an unnamed international source told S&P Global Platts, a leading provider of information on benchmark prices for the commodities and energy markets.
A mining.com article last month said the price rally was spurred by supply issues after Beijing decided to limit coal mines' operating days from 330 to 276 or fewer a year as it restructured the industry.
Chinese government stimulus plans, which increased steel production and power demand, had made things worse.
The article said future prices would adjust to reflect a more stable supply/demand dynamic with long-run pricing of around US$145/tonne.
