–Clyde Russell is a Reuters market analyst. The views
expressed are his own.–
By Clyde Russell
LAUNCESTON, Australia, June 28 (Reuters) – At first glance
the Australian government’s forecast for an increase in both
coal export volumes and value in the year starting July 1 seems
a touch optimistic.
If anything, current market signals point to a coal market
awash with excess supply, which has been driving down prices,
and most participants expect further declines, at least in the
short term.
The Bureau of Resource and Energy Economics said on
Wednesday it expected Australia’s thermal coal exports to rise
12.6 percent to 179 million tons in the 2012-13 financial year,
with the value gaining 6.9 percent to A$18.6 billion ($18.6
billion).
Assuming the volume forecast is on the money, the value
forecast assumes a price of A$103.90 a ton, which is about the
same in U.S. dollars, as the two currencies are at parity.
The current price for spot cargoes from
Newcastle, Australia’s largest thermal coal export port, is
$84.45 a ton, which is 19 percent below the bureau’s average
price for 2012-13.
Given that the start of the new financial year is less than
a week away, is it realistic to expect that prices will climb by
as much as the bureau expects?
Continued…
