Global coal price hits seven-year high

The coal price on the international market has now reached a seven-year high of US$43.35 per ton and the main reason for this surge is the difficulties in finding vessels for transportation, the Bisnis Indonesia newspaper reported in its Tuesday edition.

The Barlow Jonker Coal Index reported that the highest price was recorded on February 12, 2004. On that day, coal price was quoted at $43.35 per ton on the spot market with 135.5 index.

The lowest price in recent history was recorded at $21 per ton in February 2000.

The coal price has been fluctuating since 1997. In January 1997, coal price was at $30.5 per ton and later jumped to its highest of $33.7 per ton in May and the lowest of $27 in November.

During 1998-2000 period, coal price had been fluctuating between $22-$28 per ton. After that it never looked back and went on a surging spree.

The main reason for the surge in global coal prices is the lack of adequate vessels in the market.

?At this moment, finding a vessel for the transportation of coal is very difficult. Even if it?s there, the cost is very expensive compared to the last year's,? an exporter from an Australian joint venture company told the Bisnis on Monday.

Actually, according to the exporter, the surge in the freight cost is caused by macro international trade situation where there is a sudden jump in iron ore imports to China.

With its 8.2 percent economic growth, China must increase its iron ore imports at a rate of 25 percent per year. (*)