The former chief executive of a major coal company says some Australian miners are under huge pressure because they can’t sell to China.
Some Chinese buyers have reportedly defaulted on Australian coal contracts because it hasn’t been selling for the price they want.
As a result, the thermal coal price has hit its lowest level in 18 months
Former Macarthur Coal CEO Nicole Hollows says the defaults are serious.
“I know exactly how it feels when you have steel mills and customers that default on taking coal, particularly when it’s hedged,” she said.
“They generally say that they can’t take that, they won’t accept the estimated shipping date for arrival or they don’t want it to load and it then just gets delayed and delayed.
“If you’ve actually got the coal ready to go at port and the customer’s not going to take it, then it makes it very difficult.”
Record low demand for thermal and coking coal is driving American coal producers to the edge of solvency. Patriot Coal was the first to file for Chapter 11 bankruptcy reorganization, but it is by no means the only US coal company struggling with declining revenues. Rising operational costs, stagnant demand, and poor prices are threatening coal producers across the US and the world, though many observers predict that coal will rebound in the medium term. The trick for producers is lasting until theourcesn.-From international and ABC sources
Former CEO of Mcarthur Coal Nicole Hollows warns Queensland coal industry could fold.