The price of both thermal and coking coal gained again on Monday with the Australian export benchmark shrugging off news that Beijing will further relax restrictions on some domestic miners to meet winter demand.
Seaborne prices for coal used in power generation has nearly doubled in 2016 exchanging hands for $97.55 a tonne on Monday, up 27% just since the start of October. The last time Newcastle export prices traded in triple digits was May 2012.
According to a Reuters report Chinese “coal mines that are currently under construction will also be encouraged to complete construction and begin production of coal, the National Development and Reform Commission (NDRC) said on its website on Saturday, citing a meeting held on Friday to discuss energy supply and demand during the colder seasons.”
Metallurgical coal’s rise has been more dramatic and trading at $245.50 a tonne on Monday, the steelmaking raw material is up 15% so far in October. According to data provided by the Steel Index premium Australia hard coking coal prices are up three-fold since hitting multi-year lows in November last year.
This year’s rally was triggered by Beijing’s decision to limit coal mines’ operating days to 276 or fewer a year from 330 before as it seeks to restructure the industry. Safety closures and weather related supply curbs in China and Australia only added fuel to the fire.
China imported 24.3 million tonnes of coal in September, up more than 33% compared to last year according to official customs data. Over the first nine months of the year imports increased 15% to 180 million tonnes compared to the same period in 2015.
In 2011 floods in key export region in Queensland saw the coking coal price touch an all-time high $335 a tonne. Steam coal peaked just shy of $140 a tonne in January 2011.