The RBA highlighted the differing plights of Australia’s coal and iron ore miners in their quarterly report on Friday.
Currently thermal coal producers, the ones that export the coal used for electricity production, are shipping their product at the marginal cost of production and in many cases below.
The crash in Newcastle coal over the past 12 months has put pressure on Australia’s coal mining industry. Dealing with the fallout, a number of operations have boosted volumes, cut costs and jobs, while some mines in the Hunter Valley have been shuttered. But finally the price action might be suggesting something is changing.
Sure the downtrend hasn’t broken and on a super long term chart you can hardly see it. But with September Newcastle coal futures breaking through what chartists might call the neckline in price a test of the downtrend, at the very least seems in the pipeline.
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