Australian thermal coal prices hit $100 per tonne for first time since 2012

A stacker/reclaimer places coal in stockpiles at the coal port in Newcastle in this June 6, 2012 file photo. REUTERS/Daniel Munoz

SINGAPORE (Reuters) - Australian thermal coal spot prices have hit $100 per tonne for the first time since 2012, with a cargo ordered at that price for delivery from Newcastle port in November, according to trading platform GLOBALcoal on Tuesday.

The deal means that Pacific benchmark prices have now soared by almost 100 percent since June to levels last seen in April 2012, making coal the hottest commodity of the year.

The price rally ended half a decade of steady declines, and has lifted mining share prices like Whitehaven Coal, Glencore or Anglo American away from lows.

The price spike has been spurred by domestic mining cuts in China, which has required electricity generators and also steel makers to make up for the shortfall via imports, taking much of the market by surprise.

“Coal miners are just as surprised as anyone in how well coal has performed. Limited supplies of high-quality thermal coal should keep the market in good shape through the end of the year. After that, it will be determined by the supply response,” said James Wilson, analyst at Argonaut Securities.

The price rally is not limited to Australia. Indonesian benchmark coal prices are up around 30 percent this year, and Bambang Gatot, Coal and Minerals Director General at Indonesia’s mining ministry, told Reuters on Tuesday he expects the current price rally to last to the end of the first quarter of 2017.

After that, however, many traders say that the almost unprecedented boom of 2016 will likely lead to some form of a downward correction.

Forward prices for both Australian physical coal prices as well as for Chinese coal futures show prices fall off sharply into 2017.

Reporting by Henning Gloystein in SINGAPORE, Fergus Jensen in JAKARTA and Jim Regan in SYDNEY; Editing by Christian Schmollinger