According to the Financial Associated Press (Shanghai, Editor Xiaoxiang), as the use of coal in the power sector increases, coal prices in many parts of the world have recently hit record highs. In response, Isidro Consunji, chairman of Semirara Mining & Power Corp., the largest coal producer in the Philippines, predicts that coal prices may have peaked after setting a record high, but prices will remain high until the first half of 2022.
Consunji said in an interview with the media on Monday, “At the current high price level, people will overproduce, and then there will be an oversupply, and the price will fall.”
Before this winter, there was a severe shortage of natural gas in Europe, which triggered a snowball effect in the global energy market. Many power plants began to switch to other cheaper fuels such as coal. This caused coal prices in China and around the world to soar to record levels. Consunji said that the price of coal produced in Semirara has doubled from the second quarter, rising from US$50-65 per ton to about US$110.
Semirara’s coal production accounts for 90% of the total Philippine coal production. About half of this coal is exported, and 90% of its overseas goods are sold to China.
Consunji also pointed out that it is unlikely that the high-quality thermal coal loaded on ships in the Port of Newcastle, Australia will further rise to US$300 per ton. Last Friday, the thermal coal price soared to US$203.20 per ton, breaking the historical record set in 2008. He also said that more supplies are expected to enter the market in 5-6 months to ease price pressure.
Semirara expects the company’s coal revenue to increase by more than 50% in the fourth quarter. Consunji said that this will help Semirara and its parent company DMCI Holdings Inc. return to pre-epidemic profit levels after a sharp decline in performance in 2020.
The company also expects that, unlike last year’s sluggish demand, the maximum production capacity in 2021 will reach 15 million tons.
Semirara’s stock price has climbed more than 70% so far this year, reaching its highest point in two years. The stock closed up 7.4% on Monday to 23.95 Philippine pesos.
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