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> Coal has few friends on the buyer side Which type: metallurgic (used to make steel) or thermal (for power)? Metallurgic coal is the more expensive, loved ki
by mikemotherwell 7y ago
> Coal has few friends on the buyer side
Which type: metallurgic (used to make steel) or thermal (for power)?
Metallurgic coal is the more expensive, loved kind (as you need it to make buildings) and that is what Australia produces, at ~40% of total exports by volume (not sure via value). https://minerals.org.au/sites/default/files/181012%20Commodity%20Insights%20Met%20Coal%20Report.pdf https://minerals.org.au/sites/default/files/181012%20Commodi... BTW: that is 3X the next biggest metallurgic coal exporter (the USA).
> There seems to be real chance that the demand for Australian coal drops by >50% in the next few years
Where are you getting that figure from? Coking coal looks pretty solidly in growth from what I know.
- Arnt 7y agoI base that on a combination of two assumptions: 1. Coal is used for for generating electricity because it's the cheapest. Its buyers aren't loyal friends, its buyers want the cheapest. 2. The price for new wind/solar plants is dropping quickly, and if that goes on at the same rate as recently, then at some point in the next few years, building new wind/solar plants becomes a cheaper source of electricity than operating existing coal-fired plants. The price might not go on dropping, but I think there's a real chance it does, and if it does drop far enough and coal's customers actually want the cheapest, then one of the two key markets for coal withers as fast as customers can switch. EDIT: That ">50%" might be high. I glanced at wikipedia: "About 75% of coal mined in Australia is exported […] and of the balance most is used in electricity generation" and: "Coking coal generated A$22.4 billion of export revenue in 2012/13 financial year with thermal coal bringing in A$16.1 billion". But I mixed up value and volume.