The future does not look good for coal miners. Increasing government regulations, environmental concerns and public opinion in favor of energy alternatives are threatening the resource’s market share, and to top that all off, coal prices have hit record lows that are set to continue into the second quarter of 2014.
Specifically, according to The Province, Asian steelmakers and Australian coal miners helped set prices at their lowest level since 2007 when they agreed on a benchmark price of $120 million per tonne of coal for this year’s second quarter. Analyst Lucas Pipes from New York’s Brean Capital explained to the news outlet, “[w]e’re now at a point where it’s just too much to bear for a lot of the producers.”
The price is not right
Still, Forbes contributor Ken Silverstein writes that coal prices have dropped by over $50 per ton in parts of the US since a price spike in 2008, maintaing that nothing, “not even greater demand for Asia,” suggests a rebound. Furthermore, he notes that even though coal prices are currently at record lows, they are being matched by natural gas prices at the moment. That resource can beat out coal with lower emissions and am easier permitting process for plants, making stiff competition for the carbon fuel.
One thing is certain; if coal is to maintain a place in the market, it will have to continue to advance technology while addressing environmental concerns. The world’s increasing energy appetite is unlikely to abate any time soon, even with constantly emerging environmentally friendly technologies. David Schwedel, executive director of clean coal technology developer Coalview told Reuters, “[w]e must find a way to use the big three – oil, gas, and coal — more efficiently to maintain our way of life, while at the same time, preserving it.”