A roundup of international coal news from June 11 to June 18.
Europe
United Kingdom:
Australia
An Australian railroad issue watched closely by international metallurgical coal buyers and sellers could soon be resolved, taking the air out of recent high prices, an analyst said. A dispute over regulated returns between Australian regulators and Aurizon Holdings Ltd. that threatened to curtail at least 20 million tonnes of coal from the export market per year may be close to a resolution, Seaport Global Securities analyst Mark Levin wrote in a June 15 note. Supply uncertainty around the dispute was one of several major factors causing metallurgical coal prices to rise to over $200/tonne on the spot market, Levin said. Coal equities are still discounting a metallurgical coal price closer to $150/tonne to $155/tonne. If a resolution is announced, Levin expects it to affect Warrior Met Coal Inc., Teck Resources Ltd., Arch Coal Inc., Ramaco Resources Inc. and Natural Resource Partners LP. He said the situation is "more complicated" for Peabody Energy Corp., which ships metallurgical coal on Aurizon's lines, because a resolution would remove supply uncertainty but potentially lower prices. In April, Peabody said it did not expect the dispute to lower shipments.
Asia
China:
China's coal output in May hit 297 million tonnes, up 3.5% year over year, as producers picked up the pace to answer rising demand just ahead of summer, Reuters reported, citing June 14 data from the National Bureau of Statistics. The level of production reported is the highest since December 2017, the report said.
China will cut 11.1 million tonnes from its annual production capacity as it shutters 22 small coal mines in Inner Mongolia in 2018, part of its move to streamline the industry and lower the country's carbon footprint, Reuters reported June 11. Inner Mongolia, China's top coal mining region, expects to reach its 2020 target of cutting 54.1 million tonnes of capacity in 2018, the report said.
This feature was updated as of 4:30 p.m. ET on June 18. Some external links may require a subscription.