Coal may become one of the most popular commodities

After all the predictions about the death of coal, it becomes one of the hottest commodities in the world. A sharp rise in Chinese imports to offset a slump in domestic production saw European prices jump to nearly an 18-month high, while Australia posted its first annual growth since 2010.

In early 2016, prices languished near a ten-year low due to diminishing demand from utilities seeking to limit pollution and amid the International Energy Agency's announcement that China's golden age of fuel is over. Traders are now weighing the chances of extreme weather for major producers and further boosting China's imports. These factors can push prices even higher.

While zinc is recognized as the best performing commodity this year, its climb is over 41 percent and coal is just around the corner. Next quarter supply contracts in Amsterdam, Rotterdam and Antwerp are up 30 percent this year, while Australian benchmark contracts are up 40 percent.

Back in February 2011, Australian prices were almost double today's levels. In the "extreme" scenario, prices for the next two quarters in Europe may jump by 18 - 27 percent. Citigroup Inc. said in July that Asian prices could rise as much as 50 percent if rainfall caused by bad weather is heavier than expected, providing further market tightening in addition to a cut in Chinese production.