Chinese power generators are paying 60% more to buy coal from Chinese mines rather than from exporters such as Australia, highlighting how protectionism and geopolitical tensions are adding to the “pain” being felt across the Australian coal sector.
Thermal coal prices have more than halved over the past two years and Whitehaven Coal said on Tuesday that the murky outlook would prevent it from starting construction on new mines this year, even though industry downturns are typically the cheapest times to build new mines.
Whitehaven managing director Paul Flynn said the pain was particularly acute among those producing the type of coal Australia has traditionally sold to China, coal with energy content of 5,500 kilocalories per kilogram.
That type of coal is selling inside China for about $30 per ton more than it costs to mine and ship the same type of coal from New South Wales to China…
View entirety: Dry Cargo Magazine