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6 Pages

High-ash thermal coal: demand pull or supply push?


High-ash thermal coal: demand pull or supply push?

Report summary

The production of high ash thermal coal has increased in Australia largely due to Chinese coastal demand and producers looking to maximise the value of their product portfolios. However, in the current market producers may be incentivised to switch from high-ash too more low-ash production as the discount outweighs the cost savings for producing the high-ash product. Processing capacity constraints may restrict a mine's ability to switch between a high-ash and low-ash product. The decision is whether to invest in the development of mine infrastructure and processing plants to produce more washed low-ash coal, or proceed with business as-usual.

What's included?

This report includes 2 file(s)

  • High-ash thermal coal: demand pull or supply push? PDF - 356.74 KB 6 Pages, 1 Tables, 9 Figures
  • high-ash thermal coal.xls XLS - 330.00 KB

Description

This Coal Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

Participants, suppliers and advisors can use it to look at the trends, risks and issues within the coal industry and gain an alternative point of view when making decisions.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets.

Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future decision making. From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • The rise of high-ash thermal coal
  • Why produce high-ash coal?
  • Conclusion
  • Annex 1: Australian 2016 seaborne thermal coal cost and margin curves

In this report there are 10 tables or charts, including:

  • Executive summary
  • The rise of high-ash thermal coal
    • High-ash thermal coal production by country, Mt
    • High-ash coal marketable reserves as of 2016, Bt
    • Specifications of Australian benchmark high-ash coal
  • Why produce high-ash coal?
    • Production, change in NPV (2011-15) due to inclusion of high-ash product and breakeven high-ash coal discount by mine
    • Actual and breakeven high-ash coal discounts by mine
    • Factors influencing high-ash thermal coal production in Australia
  • Conclusion
  • Annex 1: Australian 2016 seaborne thermal coal cost and margin curves
    • Mines position on cost curve with high-ash production*
    • High-ash thermal coal: demand pull or supply push?: Image 7
    • Mines position on margin curve with high-ash production*
    • High-ash thermal coal: demand pull or supply push?: Image 9
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