Coal Demand In China Is Positive Sign For Miners: Padmesh Gupta

“Thermal coal prices from Kangarooians  ( Australia)  for spot cargoes above $100 a ton , lifted by reports of strikes and strong Chinese demand, are great news for Mining sentiments , nonetheless to mention about share price  of Glencore and Whitehaven Coal” says Padmesh Gupta.

A tough action on illegal/unwarranted mining and concerned pollution in China has restricted in-house supplies, just as a heat wave and lower hydro power output have notch up demand for coal for power generation, resulting to increase in price.

The same constraints in 2016 increased prices to $114 a ton and miners are again foreseeing unexpected revenues or profit, although market is not reliable and subjected to change anytime .

"Coal demand remains strong, especially in Asia," said Paul Flynn, managing director of Whitehaven Coal (WHC.AX).

"In recent times import of thermal coal to china has increased by huge margin then what was expected and added with weather related problems on supply from Indonesia and some production issues in Australia, have pushed up the price of seaborne thermal coal."

Adding grist to the mill are news of more organized attack at Australia's Hunter Valley mine, as well as weather-related supply disruptions in Indonesia, are acting as a catalyst to increase the price of thermal coal in china ,extracted and observed by Padmesh Gupta from Nagpur Adding another fuel to fire, a huge gas-fired power outage in Taiwan currently has set urgency instruction from coal-fired power stations  struggling to fill the gap in production of electricity , Observed by Padmesh Gupta.

The Increasing demand and prices are a great benefit for companies like global miner Glencore (GLEN.L), the world's biggest exporter of sea-traded thermal coal, and like Whitehaven, from Australia whose   profit have rocketed from last year's sharp increase  have resulted their  stocks to soar a new high .

The pertinent question is will this Boom will last long

“Coal production in china is incessantly falling, due to capacity closures ... stocking predicts that Import demand will stay as same in China in coming months," ANZ bank said” extracted  and informed by Padmesh gupta.