• Industry: Energy & Natural Resources, Mining
  • Type: Business and industry issue, Regulatory update
  • Date: 15/01/2014

Commodity Insights

Commodity Insights Bulletin
KPMG's quarterly global bulletins provide insight into trends, issues and changes within the key mining commodities.

Thermal Coal Insights: Q2 & Q3 2013 

With regional demand for coal shifting across Europe and North America, coal producers are increasingly looking to the Asia Pacific region to underpin demand growth. While key drivers of demand remain robust across the Asia Pacific region in the medium term, competition in supply and market sentiment towards the thermal coal outlook is keeping pressure on seaborne export thermal coal market prices.
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Completion and development of brownfield projects will keep the short-term price outlook challenging before longer term demand can keep pace with supply and the impact of deferring greenfield projects starts to bite.


Within the overall global supply and demand equation bigger influences will emerge at regional levels as Chinese policy in restricting the import of low quality coal, continued infrastructure restrictions on U.S. export coal, nuclear replacement strategies in Japan and Europe and the availability and access to infrastructure may change the supply mix substantially – there will be winners and losers as these changes take place.


In the longer-term the emergence of LNG as a viable source of energy remains a threat to the coal supply market but on current pricing of LNG equivalent, coal will remain competitive.



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