Coal is in record demand

Thermal coal is the world's second most important thermal fuel, and after crude oil surged above $ 50 a tonne this year, it has new benchmarks for thermal coal, especially in the face of supply disruptions and increased demand.

After several years of recession, supportive factors were a surge in oil prices and a weakening dollar, while stormy weather in some oil-producing regions and hot weather in Asia exacerbated escalating price movements.

European coal futures are up more than 8.5 percent this month to year highs of $ 54 a tonne, while the market is up more than 50 percent from its multi-year lows.

Physical coal prices have also added nearly $ 4 since mid-May with cargo from Newcastle Australia to $ 54.25 a tonne, while shipments from the Richards Bay terminal in South Africa are up $ 6 from late May to $ 56 , 60 per ton.

After falling prices between 2008 and 2016 by almost 80 percent, producers cut back on investments in new production facilities and closed unprofitable mines. Production is shrinking, helping the market rebalance.

The decline in output was also due to unforeseen events that pushed up prices further, including hurricanes and flooding around manufacturing hubs such as Australia, Indonesia and Colombia.

At the same time, demand has been strong in India for utilities in a record heat wave with heavy use of air conditioners in homes, offices and public buildings. At the same time, in Europe, the demand for coal is driven by the relatively good profitability of electricity production, as well as the unusually low generation of wind energy since the beginning of the year.

Finally, a weaker dollar makes imports of fuels such as oil and coal, which are traded in US dollars, cheaper for countries using other currencies, stimulating demand.