Coal futures drop below $72 for first time since March 2009
API2 2015 coal futures dropped to $71.90/t on Tuesday afternoon, their lowest since the height of the financial crisis in March 2009 and close to levels last seen in 2007, before the boom and bust period of 2008/09.
Prices have also almost halved since they last peaked in 2011, when the nuclear meltdown at Japan’s Fukushima reactor, unrest in gas-producing North Africa and floods in coal-mining Australia last pushed up global energy prices.
Traders said the fall in coal prices came on the back of weakening crude oil, which dropped to post-2010 lows of below $86.50/bbl, after the International Energy Agency cut its estimates for oil demand this year and next.
At the same time, German forward power prices fell close to ten-year lows as the domestic economy stuttered.
German manufacturing accounts for more than one fifth of the country’s economy, compared with the EU average of 15%, so a fall in electricity usage, often generated by coal-fired power stations, can reflect a drop in orders of German goods.