The price of power coal is expected to rise in 2020!

Power coal prices are expected to pick up this year after falling by about a third last year as demand in some Southeast Asian countries increases and funding constraints ease oversupply. Today's think tank noted that investors generally expect coal use to slow down due to the introduction of policies to encourage the use of clean natural gas and renewable energy, as well as public pressure on enterprises to cope with climate change. However, due to the relief of oversupply, the short-term market prospect is that the price of power coal will pick up. "With the coming of 2020, there are signs that the support of international coal prices at the end of last year may be a harbinger of market recovery this year," said Guillaume Perret of Perret associates, a consultancy "Although demand seems to remain largely weak, tight supply, especially in the Atlantic market, could cause prices to rebound after a sharp fall in 2019," he added.

The lack of investment in the coal industry, the difficulty of access to financing and cost cutting measures means that inventories are running out rapidly, which will ease the oversupply situation. Australian physical power coal and European benchmark coal futures fell by about a third in 2019, while European Physical prices fell by as much as 40%. However, as of January 16, 2020, the immediate loading price of Newcastle Wharf in Australia has increased by 13%, while the price of coal futures of api2 in Europe has increased by 16%. In Europe, the low price of natural gas and the high price of carbon permits mean that natural gas is more competitive than coal in power generation. With the supply of liquefied natural gas (LNG) expected to increase further and the price of natural gas under pressure, this trend will continue. The U.S. coal industry continues to decline due to competition for cheap shale gas and renewable energy, but coal use in India, Vietnam, Indonesia, Bangladesh and Pakistan is expected to continue to grow. "We see a recovery in the traditional coal market. When LNG prices eventually rise and winter supply begins, coal prices could soar as they did in 2016, said Dale Hazelton, head of power coal research at wood Mackenzie.