The Northern Miner recently spoke with Andy Roberts, Wood Mackenzie’s research director of global thermal coal markets, to get an overview of the sector. Based in Austin, Texas, Roberts analyzes and forecasts coal market supply, demand and prices. The mining engineer joined Wood Mackenzie in 2008, eventually becoming vice-president of Americas coal consulting, before moving to the coal research group in 2011.
The Northern Miner: Can you summarize what’s been happening to thermal coal demand and prices in the last few years?
Andy Roberts: We are a far cry from where we were a couple of years ago when prices for the benchmark Newcastle 6,000 kcal/kg net as received (NAR) coal had fallen to an unsustainable US$50 per tonne. There was no way for most mines to make any money at all. This was driven by overcapacity in the marketplace, both in China and in the rest of the world, and that overcapacity was a function of many factors, especially demand decline and economic rebalancing away from manufacturing. Last year, China stepped in to cut back domestic production and the market price recovered.
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