* Coal futures have tumbled 77 pct since 2008
* Coal has fared worse than oil and natural gas
* Goldman Sachs says coal demand will peak before 2020
By Henning Gloystein
SINGAPORE, Sept 23 Coal futures are trading at
$50 a tonne for the first time since 2003 as the commodity
downturn deepens, and U.S. investment bank Goldman Sachs says
the resource will never gain enough traction again to lift it
out of its slump.
Tumbling coal and metals have weighed heavily on mining
shares this week, led by the world's biggest thermal coal
producer Glencore, which saw its stock fall to a record
low of 106.35 pounds ($163.19) on Tuesday. Glencore shares are
down 82.1 percent since the firm was listed in 2011 and
two-thirds lower than at the start of this year.
Benchmark coal futures hit historic peaks in
2008, when coal traded above $200 per tonne, and like most
commodities has not returned to such heights.
Yet the plight for coal has been worse than for other fuel
as its latest downturn started in 2011, while the current slump
for oil and natural gas only started in 2014.
Coal's fall has also been steeper, plunging 77 percent since
2008 and 63 percent since 2011, compared with 69 percent and 60
percent drops for oil since the same two years.
Asian natural gas prices (LNG) are down two-thirds since
their peak, which came later than in other commodities, in 2014.
Goldman Sachs said coal is in terminal decline.
"Peak coal is coming sooner than expected," Goldman said in
a note to clients this week, adding that its consumption would
peak before the end of the decade.
"The industry does not require new investment given the
ability of existing assets to satisfy flat demand, so prices
will remain under pressure as the deflationary cycle continues,"
As a result the bank, which sold its coal mines in August,
has cut its coal price forecast.
Goldman set its forecast for Australian thermal coal at $54
per tonne for 2016, $52 for 2017, and $51 for 2018.
"We also reset our long-term forecast to $50/T, down 23
percent from $65/T, to reflect what we see as the remote
likelihood that the market will tighten ever again," it said.
Coal's weakness started in developed economies, where
natural gas and renewables eroded its market share, but spread
in 2014 to emerging markets like China and India - which rely
largely on coal to meet energy demand.
The biggest impact has come from top commodity consumer
China, where the economy is now growing at its slowest in
decades, pulling down January-August coal imports by nearly a
third from a year ago, with talk of China becoming a net coal
($1 = 0.6517 British pounds)
(Editing by Tom Hogue)