THE RETURN OF KING COAL: Prices soar 20% in March and put global living costs at risk
The Newcastle market (Australia) has seen thermal coal rise to 150 dollars per ton, its highest level in over a year. The factors are a geopolitical and climatic twist:
The domino effect of Ormuz: With the Strait of Ormuz blocked (as we saw in previous notes), the price of LNG (liquefied natural gas) and oil has skyrocketed. This has forced power plants in Asia and Europe to return to coal to avoid shutting off the lights.
Indonesia, the giant of the sector, has limited its quotas to 600 million tons (down from 790 last year), while China records its lowest production growth in a decade. Less coal available for a demand that keeps rising.
While global coal sells for 219 or 255 dollars, Russian coal in the Far East is quoted at 144 dollars. This makes it irresistible for powers like India, which faces a summer with potential blackouts if it doesn't secure massive supplies.
💸 How will this impact your wallet?
Don't be mistaken, colleague: even if you don't buy coal for your home, this increase will hit you on three direct fronts:
Many countries still depend on coal to balance their electricity grid when gas is expensive. The 20% increase in the price of the mineral will translate, sooner or later, into a fuel adjustment surcharge on your electricity bill. Prepare to see increases of between 10% and 15% on bills in the coming months.
Metallurgical coal is essential for making steel and cement. If coal prices rise, the cost of construction and manufacturing cars or appliances rises. This means that buying a home or renovating the kitchen will be significantly more expensive this year.
The rise in coal usually goes hand in hand with that of oil. As the entire energy matrix becomes more expensive, the cost of transporting food and goods increases. $ETH
The Newcastle market (Australia) has seen thermal coal rise to 150 dollars per ton, its highest level in over a year. The factors are a geopolitical and climatic twist:
The domino effect of Ormuz: With the Strait of Ormuz blocked (as we saw in previous notes), the price of LNG (liquefied natural gas) and oil has skyrocketed. This has forced power plants in Asia and Europe to return to coal to avoid shutting off the lights.
Indonesia, the giant of the sector, has limited its quotas to 600 million tons (down from 790 last year), while China records its lowest production growth in a decade. Less coal available for a demand that keeps rising.
While global coal sells for 219 or 255 dollars, Russian coal in the Far East is quoted at 144 dollars. This makes it irresistible for powers like India, which faces a summer with potential blackouts if it doesn't secure massive supplies.
💸 How will this impact your wallet?
Don't be mistaken, colleague: even if you don't buy coal for your home, this increase will hit you on three direct fronts:
Many countries still depend on coal to balance their electricity grid when gas is expensive. The 20% increase in the price of the mineral will translate, sooner or later, into a fuel adjustment surcharge on your electricity bill. Prepare to see increases of between 10% and 15% on bills in the coming months.
Metallurgical coal is essential for making steel and cement. If coal prices rise, the cost of construction and manufacturing cars or appliances rises. This means that buying a home or renovating the kitchen will be significantly more expensive this year.
The rise in coal usually goes hand in hand with that of oil. As the entire energy matrix becomes more expensive, the cost of transporting food and goods increases. $ETH