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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.

Results for gs
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21 Apr 14 04:54:49
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21 Apr 14 04:40:07
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21 Apr 14 04:38:49
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21 Apr 14 04:37:07
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Germán Messina
21 Apr 14 04:32:15
RT @DarioEpstein: $GS y $MS reportaron ingresos netos más sólidos x operaciones con materias primas durante el trim Reuters Chau subprime, …
Dario Epstein
21 Apr 14 04:30:06
$GS y $MS reportaron ingresos netos más sólidos x operaciones con materias primas durante el trim Reuters Chau subprime, hola commodities...
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21 Apr 14 04:27:36
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21 Apr 14 03:50:08
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21 Apr 14 03:29:01
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CABuyer
21 Apr 14 03:17:07
$GS Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet http://t.co/b0Xw7drqLy
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21 Apr 14 03:06:07
$GS: Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet http://t.co/AU6Yo7s20H
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21 Apr 14 02:36:50
$GS 7:52 am Goldman Sachs beats by $0.59, b http://t.co/4i21VqRvsv
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21 Apr 14 02:23:25
$GS: Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet http://t.co/DHqt2tV7tb
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21 Apr 14 02:18:23
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Stock Herald
21 Apr 14 02:17:46
$GS: Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet http://t.co/DHqt2tV7tb
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CABuyer
21 Apr 14 02:12:05
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21 Apr 14 01:55:14
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21 Apr 14 01:53:14
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Informer
21 Apr 14 01:39:34
$GS: Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet http://t.co/jJIzU4iNJR
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21 Apr 14 01:21:02
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21 Apr 14 01:16:07
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21 Apr 14 01:02:31
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21 Apr 14 00:33:21
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21 Apr 14 00:16:11
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21 Apr 14 00:07:18
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21 Apr 14 00:00:55
RT @ForTraders: Mobile payment startup Square plans sale as losses widen - WSJ http://t.co/Tn98DACDGS $AAPL $EBAY $GOOGL $GS $MS $TWTR $GOOG
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21 Apr 14 00:00:02
Mobile payment startup Square plans sale as losses widen - WSJ http://t.co/Tn98DACDGS $AAPL $EBAY $GOOGL $GS $MS $TWTR $GOOG
Stock Forums
20 Apr 14 23:51:31
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PriceTrader
20 Apr 14 23:24:47
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Tad Legas
20 Apr 14 23:20:52
#Buy $DNAX #DNA #Energy #Drinks #New #CEO #Real #Experience > $FNMA $HEMP $PMCM $PHOT $PLPL $CBIS $JPM $GS $MS $TSLA $FB $TWTR $GOOG $MSFT
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20 Apr 14 22:10:02
Bankers win friends again in Europe with lure of easy money http://t.co/Vkh10xUHp2 $BNP $JPM $GS $MAN
00Matt
20 Apr 14 21:22:05
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Haiden Dallas
20 Apr 14 21:15:44
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20 Apr 14 20:45:53
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20 Apr 14 20:23:47
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Stock Herald
20 Apr 14 20:11:33
$GS: Treasury Auctions for the Week of April 21 http://t.co/S52wUQyWLg
Timothy J. Tanko
20 Apr 14 19:58:20
RT @AaronLucchetti: Dramatic pause for Goldman earnings, $GS
Crew Daily
20 Apr 14 19:58:09
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Ben Franklin
20 Apr 14 19:51:11
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20 Apr 14 19:50:52
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20 Apr 14 19:14:09
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Informer
20 Apr 14 19:12:04
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iHangout
20 Apr 14 19:06:45
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20 Apr 14 19:06:00
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20 Apr 14 19:04:41
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Dan
20 Apr 14 18:30:45
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GavinGreenberg
20 Apr 14 18:23:17
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20 Apr 14 18:17:30
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By  +Follow August 23, 2013 10:21AM
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