The Strategist

Asia hits record rise in coal prices

06/28/2022 - 11:13

Last week, a shipment of coal from the Asian region with delivery to Europe was sold at $421 per tonne, setting a record high for Asian coal exports, according to dealers surveyed by Bloomberg. Due to a lack of alternate energy sources and an increase in demand for electricity brought on by the Asian heat wave, energy prices have soared.

The price of coal at the Australian port of Newcastle surpassed $400 per tonne for the first time, according to the IHS Markit index, reaching $402.5. The agency summarized the market position as follows: "Power producers in Asia and Europe are scrambling to secure more coal supply as a replacement for depleting natural gas reserves, while mining companies are battling to raise production."

Increasing energy costs for households and shortages of resources in developing nations like Pakistan are anticipated consequences of higher coal prices. Additionally, a rise in coal consumption will have a negative effect on the environment because coal is one of the dirtiest energy sources, and its resurgence in the current climate runs counter to the environmental policies of many European and Asian nations.

It was revealed last week that the Austrian authorities had chosen to reopen the shut-down coal-fired power plant in Mellach as a result of the decrease in gas supplies. Its closure had previously been referred to as a "historic step" toward the switch to clean energy.