METC - Coal's popularity as power generator shows problems of clean energy transition
Thermal coal (KOL) may be the world's least liked commodity, but it is also one of this year's best-performing global assets, primarily due to rebounding electricity demand.The price of Australian coal - the benchmark for the vast Asian market - has surged 80% YTD to nearly $146/metric ton, its highest level in more than a decade, and its South African equivalent also trades at 10-year highs, up 44% in 2021.After falling slightly in 2020 from COVID-related shutdowns, global electricity demand is set to grow nearly 5% this year and 4% next year, the International Energy Agency says.Robust demand from China is the primary driver, with Chinese buyers willing to secure material at highest prices.A drought earlier this year in southern China, which knocked out hydroelectric dams and raised demand for coal, has played a significant role in coal's run higher.At the same time, production from Indonesia - China's biggest overseas
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Coal's popularity as power generator shows problems of clean energy transition