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1.Market Observations, 8.Was Sticky

14 Oct 2016 (AFR) – King Coal’s nervous re-awakening

(14 October 2016, AFR, p41, Bloomberg)

‘Surging coal prices have been a surprise blessing for mining companies this year. Few of them seem to believe it will last. The rally has been driven by Chinese policy changes that curbed production rather than any pick-up in demand. That means producers who sought to survive a downturn by shuttering mines aren’t yet ready to buy into it. Coking coal, used to make steel, has almost tripled this year, while thermal, used to generate electricity, is up 56 per cent. The biggest miners such as BHP Billiton and Teck Resources remain cautious on how long the rally will last. While Glencore this week said it plans to restart a small mine, exports will be unchanged.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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