(Mining Journal, Sept 28, 2006) Higher demand and tighter supply should boost thermal coal prices in 2007, although the cost of coking coal may fall, said US-based investment bank Citigroup Inc.

Bottlenecks in rail and port networks in South Africa and Australia, coupled with a potential drop in exports from Indonesia, should help support prices, said Bloomberg, citing Alan Heap, director of global commodity analysis at Citigroup.

Demand for thermal coal is rising in China, India and Europe, while demand for coking coal is slowing, he added.

Commenting on the recent fall in thermal coal prices, Mr Heap said he expected the move to be short-lived.

"Recent weakness in prices is due to short-term factors that are unlikely to be sustained. Our expectations are that we will see another increase in the thermal coal price on a contract basis in the next round of negotiations."

Source:Mining Journal
tag:China energy coal