Gerard Peter | Mining Review Africa
While there is a concerted effort by nations to reduce reliance on coal for both energy and production purposes, research analyst Fitch Ratings believes that the medium-term outlook for the commodity remains buoyant.
There can be no doubt that the coronavirus pandemic has had an effect on global demand for both thermal and metallurgical (met) coal. According to Fitch, thermal coal prices had been exceptionally low, around US$49/t in August and September 2020 for the Newcastle 6 000 kilocalories grade, making 60 – 70% of global seaborne coal suppliers unprofitable and prompting production cuts. For the most part, the decrease in demand for thermal coal was driven by China.
However, according to Jenny Huang, director of Fitch’s China Corporate Research team, the demand is likely to improve in 2021 following a very sluggish 2020. This demand will mainly be driven by a resurgence in the global economy, particularly in Asia…Full Story