Unloved Coal Seen Surging as China Cuts Collide With La Nina
- Prices may rise 50% if La Nina rain worse than expected: Citi
- Bank of America also raised forecast of Newcastle coal price
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Thermal coal prices in Asia may jump as much as 50 percent if rainfall caused by La Nina is heavier than expected, further tightening the market as China cuts production, according to Citigroup Inc.
Prices at the Australian port of Newcastle, an Asian benchmark, may increase to $90 a metric ton if La Nina rainfall hinders Australian and Indonesian output, analysts led by Ed Morse wrote in a note e-mailed Monday. China’s steep production cuts are simultaneously raising demand for seaborne coal, they wrote. Prices have risen 19 percent so far this year to about $60 a ton, according to globalCOAL, following five years of declines.