In October, the market’s increasing demand for winter coal is the main line that has recently pushed up coal prices. Under the influence of the “La Niña†phenomenon and the 2010 Cold Heave in the Northern Hemisphere that may be facing the “one-hundred-thousand-thousand-year†cold weather, the demand for the international thermal coal market, which had been weak in performance, began to grow rapidly, and prices rebounded and quickly rose. As of the end of October, the spot price of thermal coal in Richards Port of South Africa soared from US$84.14/ton in September to US$96.58/ton; the spot price of thermal coal in Europe’s Three Ports reached US$103.95/ton; the spot price of thermal coal in Newcastle, Australia exceeded 100 The dollar / ton integer mark, closed at 100.48 US dollars / ton, both hit a new high in 2010.
In addition, Tokyo Electric Power Japan and the Australian Xstrata Group signed a new thermal coal supply contract, the contract period from October 2010 to September 2011, the price was 97.75 US dollars / ton, and the Japanese power company just last month The Xstrata Group also signed a thermal coal supply contract with the same contract period as before, at a price of $97.70 per ton. The signing of the contract basically ensures the basic needs of Japanese power companies for winter coal use.
Another major driving force for the dramatic increase in thermal coal prices comes from fluctuations in the currency market. The sustained loose monetary policy introduced by the Fed led to the continuous devaluation of the US dollar. The prices of precious metals, non-ferrous metals, agricultural products and other international commodities surged. Coal prices also maintained a certain increase, but the increase was small. At the same time, the domestic currencies of export-oriented countries, such as the Colombian peso, the South African rand and the Australian dollar, have also risen steadily against the US dollar, even standing at historical highs. In particular, the increase in the exchange rate of the Colombian peso, the South African rand and the Australian dollar against the U.S. dollar has reached 10% since August, and before October, the increase in coal prices was far less than 10%, which made the market for international thermal coal prices rise. Expected to continue to strengthen.
At present, the international coal export is based on the US dollar basis, while in the export of resource-based countries, the extraction of coal resources, transportation and logistics and other cost expenditures are settled by the local currency. With the appreciation of the local currency, the depreciation of the US dollar, the company’s income has dropped sharply, and has been severely compressed. The profitability of coal export companies. Large multinational resource-based companies like BHP Billiton and Rio Tinto are not immune. Due to the strength of the Australian dollar, the apparent production cost of BHP Billiton's thermal coal in Australia reached US$65/tonne to US$70/tonne, plus the railway transportation costs and the port’s The cost of loading and unloading warehousing, and normal consumption, the true profit of the company is about 10 US dollars / ton. As the pressure of increasing the value of local currency in export-resource-based countries to increase corporate profits, coal exporters will continue to increase coal export prices in the fourth quarter, further shifting the downstream industry to negative factors caused by currency appreciation.
Overall, the rigid demand for coal this winter will support the overall trend of the international coal market to keep up. In early November, the Fed will discuss the controversial new round of quantitative easing at the meeting on interest rates, but there are still many uncertainties on many issues, and the outcome of the meeting will also affect the international commodity market. Short-term trend. In the medium term, due to stable domestic prices and no signs of inflation, the US consumer price index rose by only 0.1% in September, even lower than expected, so the Fed is likely to continue to maintain its monetary easing policy and accept the continued devaluation of the US dollar. This will further accelerate global inflation and will further increase the overall price of international bulk commodities including coal.
In addition, Tokyo Electric Power Japan and the Australian Xstrata Group signed a new thermal coal supply contract, the contract period from October 2010 to September 2011, the price was 97.75 US dollars / ton, and the Japanese power company just last month The Xstrata Group also signed a thermal coal supply contract with the same contract period as before, at a price of $97.70 per ton. The signing of the contract basically ensures the basic needs of Japanese power companies for winter coal use.
Another major driving force for the dramatic increase in thermal coal prices comes from fluctuations in the currency market. The sustained loose monetary policy introduced by the Fed led to the continuous devaluation of the US dollar. The prices of precious metals, non-ferrous metals, agricultural products and other international commodities surged. Coal prices also maintained a certain increase, but the increase was small. At the same time, the domestic currencies of export-oriented countries, such as the Colombian peso, the South African rand and the Australian dollar, have also risen steadily against the US dollar, even standing at historical highs. In particular, the increase in the exchange rate of the Colombian peso, the South African rand and the Australian dollar against the U.S. dollar has reached 10% since August, and before October, the increase in coal prices was far less than 10%, which made the market for international thermal coal prices rise. Expected to continue to strengthen.
At present, the international coal export is based on the US dollar basis, while in the export of resource-based countries, the extraction of coal resources, transportation and logistics and other cost expenditures are settled by the local currency. With the appreciation of the local currency, the depreciation of the US dollar, the company’s income has dropped sharply, and has been severely compressed. The profitability of coal export companies. Large multinational resource-based companies like BHP Billiton and Rio Tinto are not immune. Due to the strength of the Australian dollar, the apparent production cost of BHP Billiton's thermal coal in Australia reached US$65/tonne to US$70/tonne, plus the railway transportation costs and the port’s The cost of loading and unloading warehousing, and normal consumption, the true profit of the company is about 10 US dollars / ton. As the pressure of increasing the value of local currency in export-resource-based countries to increase corporate profits, coal exporters will continue to increase coal export prices in the fourth quarter, further shifting the downstream industry to negative factors caused by currency appreciation.
Overall, the rigid demand for coal this winter will support the overall trend of the international coal market to keep up. In early November, the Fed will discuss the controversial new round of quantitative easing at the meeting on interest rates, but there are still many uncertainties on many issues, and the outcome of the meeting will also affect the international commodity market. Short-term trend. In the medium term, due to stable domestic prices and no signs of inflation, the US consumer price index rose by only 0.1% in September, even lower than expected, so the Fed is likely to continue to maintain its monetary easing policy and accept the continued devaluation of the US dollar. This will further accelerate global inflation and will further increase the overall price of international bulk commodities including coal.
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