The price of coal used in power stations in Asia has fallen to its lowest level in three years due to fading demand in India and China, the two biggest coal consumers, said the Financial Times.
Having surged to $120 a ton last summer, the Australian benchmark seaborne price of thermal coal has fallen 44% to $61 a ton, according to S&P Platts. Coal’s fall is being driven by slower growth in power demand in China, the world’s largest coal consumer, as well as ample supplies of the fuel, said FT analysts.
The slump comes as coal faces increasing competition around the world from cleaner, renewable energy such as wind and solar, as well as cheap natural gas. Coal’s weakness is likely to hit earnings for the largest coal miners including Glencore, Anglo American and BHP Billiton. Shares in Glencore, which relies on thermal coal for almost one-fifth of its earnings, have dropped 20% this year.