Coal industry reaches bottom of price cycle

According to the Chief Economist of Queensland's Department of Natural Resources and Mines, the coal sector is showing some signs of recovery.

David Rynne stated that he feels the industry has touched the bottom of the price cycle. He argued that forecasts imply that through till 2018 the price of both metallurgical and thermal coal would begin to recover.

Projections from the department assert that the price of metallurgical coal will rise to Australian US$180 per t, from its current contract price of about US$130.

Despite this improvement, Mr Rynne did add that the prospects for thermal coal were not as good, and said the sector would "remain in the doldrums".

Rynne concluded that costs of production had dropped to near pre-boom levels and Queensland producers are still globally competitive. However, there are worries over the number of high-cost operations in the state, which could become unviable.

Edited from source by Joseph Green. Source: ABC

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