• 3 minutes Natural gas is crushing wind and solar power
  • 7 minutes OPEC and Russia could discuss emergency cuts
  • 11 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 41 mins So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 35 mins Fight with American ignorance, Part 1: US is a Republic, it is not a Democracy
  • 8 hours Blowout videos
  • 10 hours Question: Why are oil futures so low through 2020?
  • 4 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 7 hours Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 hours CDC covid19 coverup?
  • 13 hours The Arithmetic Of Fracking
  • 19 hours Charts of COVID-19 Fatality Rate by Age and Sex
  • 1 day Shorting Gold
  • 5 hours Who decides the Oil costs?
Dave Forest

Dave Forest

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

More Info

Premium Content

The Entire Chinese Coal Industry is Bust

At least for the time being.

Platts reports data this week showing that the current Chinese price for thermal coal (as reflected in the FOB Qinhuangdao 5500 NAR marker) is below the cost of production for more than 90% of domestic miners.

That's a huge revelation for the global thermal coal market. No one in China is making money at current prices.

There hasn't yet been much word on coal mines closing in the country. But that would be the next logical step under current circumstances. The chart below (with data from China Data Online) shows that Chinese coal producer profits (black line) dropped dramatically in the first half of 2013.

Chinese Coal Producer Revenues
The data show that the drop in profits is partly a result of declining prices (red bars). But more due to a pervasive problem for the global mining sector: rising costs (blue bars).

It would appear that today's thermal coal prices are simply too low for the current economic environment. That should provide an upward push to pricing sooner or later.

Here's to drawing the line in the right place,

By. Dave Forest




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




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