Thermal coal prices in Asia may jump as much as 50% if rainfall caused by La Niña is heavier than expected, further tightening the market as China cuts production, the South China Post reported, citing a Citigroup study.
Coal prices at the Australian port of Newcastle, an Asian benchmark, may increase to $90 per metric ton if La Niña rainfall hinders Australian and Indonesian output. China’s steep production cuts are simultaneously raising demand for seaborne coal. Prices have already climbed 19% so far this year to about $60 per metric ton, according to globalCOAL. Citigroup analysts are now reportedly bullish on short-term thermal coal prices.