International Coal Market – Costs and Players
Until 2003, international coal prices alternated between $20-30 per ton. In 2008, the price of coal climbed to a peak of $200 per ton, and has experienced high volatility ever since. Over recent years, we have witnessed a decrease in global coal prices due to the decline in the demand for coal, and from 2014 onward there was a similar decline in Europe and China as well. As of late 2015, coal prices were $50 per ton.
A Trader and Consumer's Market
The global coal market is not just a consumer's market, but a trader's market as well. Giant companies handling coal purchase for trade purposes can create additional demand for coal in the international market and impact prices.
Most global traders are corporations established by private electricity companies which purchase coal for self-production, but also for trading purposes. For this reason, coal prices are impacted by speculations and not only by supply and demand balance.
Recently, large coal suppliers preferred to sell coal directly to the end consumers. For this reason, many traders had to reduce the volume of traded coal, and some even abandoned the coal trade market.