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Coal Production Increases On Weaker Australian Dollar

By  +Follow August 23, 2013 10:21AM
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The recent weakness of the Australian dollar is causing an uptick in coal production in the country that appears likely lead to a further increase in surplus, which for 2012 were already tallying at some 20 million tons.

The discovery of massive shale reserves in the US has led to a boom in oil and natural gas production, which has in turn taken a toll on domestic usage of coal as an energy supply. The story is different in rapidly developing countries, however, and Australian producers have been taking advantage of the struggling currency in order to increase output while overhead expenses are low. Indeed, coal shipments from the country are up over 13 percent on a year-over-year basis. According to the financial services firm Macquarie Group Ltd, the 17.6 million tons the country exported in June was a monthly record.

Higher exports have not come without consequences however. Australia’s Newcastle export terminals in New South Wales saw prices drop 10 percent in the same month to $77.75 per ton. Coal prices in Newcastle were down nearly 20 percent overall last year, and July’s average of $76.63 per ton was the lowest since fall of 2009.

Analysts have responded to this situation by reducing forecasts, as Goldman Sachs (GS) and Citigroup (C) both agree that coal prices in 2013 will be lower by around 7 percent. And the industry itself seems to be fully aware of the situation. Yancoal Australia Ltd., a Chinese-run operation, announced in its recently-released mid-year production results that the relatively stable demand that has persisted is being overtaken by growing surplus, as mining companies take advantage of currency conditions to produce more for less before having to contend with inevitable cost cutting measures.

The Australian Coal Association has recently noted that the strength of the Australian dollar in recent years accounts for some 30 percent on higher prices, and says that the industry is 11,000 jobs poorer as a result.

For the time being, however, demand is expected to stay strong enough to support a 7 percent projected increase to 183 million tons exported by the end of the year. Indonesia, the only country that exports more coal than Australia, could see exports up as much as 6 percent. For the time being, the difficult decision to cut output can and will continue to be postponed.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for gs
Lupita Finanzas
23 Nov 14 01:06:28
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
lookn4wins
22 Nov 14 22:43:51
GS 189.59 Stock Charts $GS Goldman Sachs Group Inc. (NYSE) Any opinions on GS? Please reply to this post. Last http://t.co/9qDA7BFlRG
Max Maxwell
22 Nov 14 22:38:46
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
Ackmanscam
22 Nov 14 20:55:01
RT @GoldmanSachs: David Kostin, $GS chief US equity strategist, talks about his 2015 #outlook on @CNBC: http://t.co/og9hKSpghs
Baarah Kuriyah
22 Nov 14 19:18:41
RT @RudyHavenstein: OP-ED: Is Goldman Sachs' reign of terror finally over? $GS http://t.co/8TFoTPczxR
Babak Morshedizadeh
22 Nov 14 19:18:11
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22 Nov 14 19:17:52
RT @RudyHavenstein: OP-ED: Is Goldman Sachs' reign of terror finally over? $GS http://t.co/8TFoTPczxR
Gary Webb
22 Nov 14 19:14:14
RT @RudyHavenstein: OP-ED: Is Goldman Sachs' reign of terror finally over? $GS http://t.co/8TFoTPczxR
Terry Kinder
22 Nov 14 19:13:07
RT @RudyHavenstein: OP-ED: Is Goldman Sachs' reign of terror finally over? $GS http://t.co/8TFoTPczxR
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22 Nov 14 19:09:33
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Ryan Francis
22 Nov 14 18:30:14
RT @GoldmanSachs: #TBT: Way back when - vintage $GS logos from the 50's & 60's. #GS145 http://t.co/fPG0KxG40S
Libros de Bolsa
22 Nov 14 17:54:43
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
Edward Dowd
22 Nov 14 16:18:12
@nanexllc There is an unholy relationship going on since 2009. I wonder what it is that makes $GS untouchable.
Trader Cracker
22 Nov 14 15:45:57
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
BolsaNews
22 Nov 14 15:31:03
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
FinSentS SP500
22 Nov 14 15:14:02
$GS:US Carter's (CRI) Scheduled to Post Quarterly Earnings on Thursday #GOLDMAN SACHS GROUP INC http://t.co/gRTVVUyAcX #SP500
Richard Hargrave
22 Nov 14 15:10:29
WEEKLY WRAP UP, $NYAD, $IWM, $GS, $GME, $GDX, $QQQ, $EWZ, $ETC $ETC. http://t.co/UH2rAMp4XD
Nick Madden
22 Nov 14 15:04:40
RT @KateKellyCNBC: 1st F-150 came off assembly line last week, and Senate panel argues that $GS made the metal in it pricier. More today ht…
Nick Madden
22 Nov 14 15:02:09
RT @KateKellyCNBC: Levin to $GS: It's the premium issue which is the issue here, as well as the affect of the queue. High correlation betwe…
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22 Nov 14 14:36:18
NY Fed Pres Holds Firm Amid Charges of Weak Oversight http://t.co/AV45cEABiZ $FED $GS $$
Eternity101
22 Nov 14 14:09:59
RT @Lizardjb3: @Eternity100000 will be back Monday Night.. Fuck $PCLN .. Already removed it from my spread sheet , gone ... Made it up in $…
James F Bowen III
22 Nov 14 14:06:49
@Eternity100000 will be back Monday Night.. Fuck $PCLN .. Already removed it from my spread sheet , gone ... Made it up in $GS, $JPM $MS .
PennyStock Zone
22 Nov 14 13:52:35
http://t.co/fnBiu3MA1X <-- Awesome trading DVD featuring 3 profitly gurus! #stocks #trading #nyse $FB $TWTR $VSR $MAC $VZ $GS
Eternity101
22 Nov 14 13:45:38
I N D I C A T O R S $BANK $RTH $VXO $VIX $TNX $TLT $SOX $JJC $GLD $GS $TRIN $TICK $OEX $DJU $FXY $BPSPX http://t.co/wH1i59ve6Y
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22 Nov 14 13:45:07
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22 Nov 14 13:29:08
$GS picks the 32 best European stocks for 2015. http://t.co/Uh3RDUUj6a
KIMBERLIE Sadirah
22 Nov 14 12:17:17
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22 Nov 14 11:50:08
578% Gains On Penny Stocks in one month! Plus a New Pick Is Coming: http://t.co/2W3yKD2d5Q $GS $ZION $ISRA
Igor Gonta
22 Nov 14 11:41:33
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
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22 Nov 14 11:41:11
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StockTwits Charts
22 Nov 14 11:39:10
RT @StockTwits: Total M&A has exceeded $3 TRILLION this year. Here are the banks doing most of the deals -> http://t.co/vV03lNeWSx $GS $MS …
Laurie
22 Nov 14 11:32:56
FU #GoldmanSachs @GoldmanSachs $GS #Banking AllYouDoNotDo & #Commercial interrupt-song ct @GovCuomo #Flood Urgent http://t.co/NbUJP7MawJ #NY
4-traders.com
22 Nov 14 11:05:08
Wall Street Banks dumping some physical commodities units http://t.co/t0micdimml $GS $JPM $MS
Matthew Dear
22 Nov 14 09:23:20
RT @GSCareers: RT @GoldmanSachs: #TBT: Way back when - vintage $GS logos from the 50's & 60's. #GS145 http://t.co/JblpOK5pod
Brad Moseley
22 Nov 14 09:16:22
RT @RudyHavenstein: OP-ED: Is Goldman Sachs' reign of terror finally over? $GS http://t.co/8TFoTPczxR
PennyStock Zone
22 Nov 14 08:59:53
http://t.co/fnBiu3MA1X <-- Awesome trading DVD featuring 3 profitly gurus! #stocks #trading #nyse $FB $TWTR $VSR $MAC $VZ $GS
Rumen Lupov
22 Nov 14 08:19:54
RT @robwilliamsNY: Global M&A crosses $3 trillion for first time since 2007 http://t.co/t1qhvrzVdi #mergers $GS
Prof. C.J. Godlewski
22 Nov 14 08:02:52
much room on east side for $GS RT @INTLSpectator: GRAPHIC: European countries, public debt as % of GDP (2014). http://t.co/9yss0sqWlJ
Half Full Publishing
22 Nov 14 07:30:10
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22 Nov 14 07:17:16
$GS:US Carter's (CRI) Scheduled to Post Quarterly Earnings on Thursday #GOLDMAN SACHS GROUP INC http://t.co/F5I9FVzYVX #SP500
PennyStock Zone
22 Nov 14 07:08:35
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Bidness Etc
22 Nov 14 05:16:50
Fed Responds To Criticism It Is Not Tough Enough- http://t.co/OxdQAewVXB $GS $JPM
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22 Nov 14 05:05:02
Goldman Sachs : Oil at $75 Means Patches of Texas Shale Turn Unprofitable http://t.co/Evran5qK2h $GS
Katheleen Ventura
22 Nov 14 02:00:53
Sick and Tired of losing money on $DV $GS $WDC $ABX #StockMarket http://t.co/GmUMpmOob0
YourPersonalTrader
22 Nov 14 01:51:49
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22 Nov 14 01:01:42
Great #Stock Newsletter you must have $GS $CRM $TECH $RT I suggest http://t.co/0Tkmfa7F9i
PennyStock Zone
22 Nov 14 00:56:41
http://t.co/fnBiu3MA1X <-- Awesome trading DVD featuring 3 profitly gurus! #stocks #trading #nyse $FB $TWTR $VSR $MAC $VZ $GS
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22 Nov 14 00:49:08
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Hilde Phipps
22 Nov 14 00:25:25
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Anne Howsham
22 Nov 14 00:08:10
Could be breaktout time on $GS $CBSH $BSX $IBM #moneymanagement http://t.co/RHPquHHRIj
				
				
By  +Follow August 23, 2013 10:21AM
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