BEWARE THE RECENT COAL PRICE REVIVAL
All Buyers and Sellers should be very worried about the recent coal price revival we have seen over the last few months.
Buyers contracting in July/August are now having failed contracts, many Sellers that signed 6 to 10 weeks ago have seen up to 10usd or more per mt jump up in prices and many are now defaulting on their contracts, even some Sellers who have given a PG are defaulting, better to lose the 2-5% PG and gain more from another Buyer paying the higher price is their thoughts.
But this could all turn around and bite the Sellers back sooner than they think, when prices do the opposite and drop again (and drop again they will) it will be the Buyers defaulting on their contracts, so the tables will be turned.
Both sides can avoid this if they are not greedy and mutually agree a simple formula for long term contracts, but I am sorry to say many from both Sellers and Buyers are greedy and most would rather try to screw each other than be fair.
WAKE up Buyers and Sellers, long term is better for ALL sides, be fair and NOT greedy, then a 1 year or more contract will be just that.
In Coal We Trust
8 年i do not think the price will be decrease immediately, see the trends this the time to take the opportunity !
Locksmith Owner of Lockkeys Locksmith Services & Training
8 年The UK produced some of the finest coal in the world and now we buy it in from elsewhere disgusting state of affairs.
Coal and Minerals
8 年Some developments like rise in price of petcoke and US coal could prompt Indian buyers to look for very high grade coal from Indonesia. Even South African Steam coal prices are high now. But prices will soften to some extent as market conditions are not good.
Certified Human Capital Professional ; Certified Professional Management Accountant
8 年Mr. Jonathan Goodman is really good article, however the condition you have describe in your article shows that Seller does not respect on their contract which they had agreed to supply with all substances in previous condition. However both party (buyer or seller) should obey each responsibilities on that supply contract. furthermore, some practitioner of Coal Mining Business still doubt with this up rising coal price. Does it goes to new normal which hopefully around $80-90 /MT or it just false alarm and it goes drop again.