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market | IST

Coal prices continue to rise globally; here’s why

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This year, with an increase from various countries, including India and US where the coal production seems to be picking up, the overall production is expected to be at around 7.75 billion tonne, as per IEA.

Coal has been making headlines for the past few weeks with a 38 percent gain in prices last month. Over the last six months, the commodity’s price has seen a 160 percent gain and more than 200 percent in the current year itself. The price has gone up to an all-time high of $270 a tonne in the case of futures when it comes to coal prices.
According to the International Energy Agency (IEA), the global coal production was more than 8 billion tonne in 2018-19. Last year, there was a very sharp decline in production due to the COVID-19 pandemic and concerns on labours and demand, so the figure stood at 7.74 billion tonne. This year, with an increase from various countries, including India and US where the coal production seems to be picking up, the overall production is expected to be at around 7.75 billion tonne, as per IEA.
China has asked coal miners to start producing more. Though there is a revival in production, nearly 60 coal mines in China have been forced to shut because of heavy rains, flooding and landslides, etc.
Meanwhile, the Indian coal market saw a revival after the second wave of COVID-19. The production, however, has declined but stronger numbers are expected. It’s going to be about import numbers globally that would suggest whether or not the domestic output actually has picked up.
Several other IEA reports say that because of the increase in production and consumption of coal this year, renewables do not seem to be picking up and there would be a carbon emission increase of 5 percent this year because of coal burning.
The reports also suggest that the coal demand globally is expected to hit 2014 highs this year while the demand for renewables is expected to grow by 8 percent year-on-year as against the earlier expectation of a 12 percent increase.