• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 2 hours WTI @ $75.75, headed for $64 - 67
  • 3 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 3 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 42 mins Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 10 hours U.S. - Saudi Arabia: President Trump Says Saudi Arabia's King Wouldn't Survive "Two Weeks" Without U.S. Backing
  • 7 hours OPEC's No. 2 Producer Wants to Know How Buyers Use Its Oil
  • 9 hours Iranian Sanctions - What Are The Facts?
  • 3 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 2 hours EU to Splash Billions on Battery Factories
  • 22 hours How High Can Oil Prices Rise? (Part 2 of my previous thread)
  • 10 hours Superhumans
  • 6 hours Who's Ready For The Next Contest?
  • 7 hours China Thirsty for Canadian Crude
Alt Text

Why China Can’t Shake Its Coal Dependency

China’s drive to reduce its…

Alt Text

Trump’s Bizarre Bid To Bailout Coal And Nuclear

The Trump administration is doing…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Is The Coal Market Finally Capitulating?

Is The Coal Market Finally Capitulating?

If you're a coal investor, there's one piece of data you need to see this week.

New production figures from world-leading exporter Indonesia.

Data released by the Indonesian government this week showed a huge drop in mine output for the first quarter. With overall coal production falling 21% as compared to the first quarter of 2014. Related: The Real History Of Fracking

That equates to a loss of 27 million tons of coal supply. Suggesting that Indonesia's overall output could fall by around 100 million tons this year.

That's a critical observation for the global coal market. Being the first major drop in output we've seen from Indonesia since coal prices started their steep decline in 2011. Up until now, Indonesian production had reportedly been continuing to rise -- as miners tried to compensate for lower sale prices by putting out more product. Related: Huge 100 Billion Barrel Oil Discovery Near London

If a trend toward lower production here holds, it would be a sign that the global coal market is finally capitulating under low prices. And a fall in Indonesian production would be a big step toward getting the market balanced again -- given that the nation is by far the world's largest exporter, especially for key consuming countries like India, China and Japan. Related: Event Horizon: Major Catalysts In These Commodities This Year

One point of caution here is that Indonesia's production statistics are notoriously unreliable. With the numbers often being revised after the fact, due to factors like uncounted output from illegal mines. Indeed, the chairman of the Indonesian Coal Mining Association, Pandu Sjahrir, said he is waiting for confirmation of the government stats before commenting further on the state of Indonesia's mines.

At the very least, this is a happening to put on our radar screens. Watch for further data coming out of Indonesia to confirm this critical trend.

Here's to coal, hard reality,

Dave Forest

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News