Coal/Straits Asia: Prices may climb to the highest level in almost 3 yrs as China’s worst drought in half a century depletes hydroelectricity supplies, prompting utilities to burn more fossil fuels amid a nationwide power squeeze. UBS note that Thermal coal price of Newcastle spot, the benchmark price for Asia, may rise to $150/mt in the next 3 mths from $117…..
Add that Domestic Chinese thermal coal prices are much higher than regional prices now, so much higher that they exceed all freight costs, which makes thermal coal imports very attractive. We note that potential beneficiaries of higher coal prices could include Straits Asia and Noble Grp.
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