Home World Business Whitehaven tips strong demand, high prices after record coal sales

Whitehaven tips strong demand, high prices after record coal sales

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Australian coal producer Whitehaven Coal  expects continued strong demand and high prices for thermal coal  as it released a strong set of quarterly production numbers on Thursday showing higher production and record coal sales.

Total coal sales jumped 21 per cent compared to the same quarter last year, to a record 6.1 million tonnes, while the run of mine coal production was up five per cent on the same period last year to 5.7 million tonnes.

Whitehaven Coal chief executive Paul Flynn. Whitehaven Coal chief executive Paul Flynn. Photo: Vince Caligiuri

In a statement to the ASX on Thursday Whitehaven said current spot and forward prices for thermal coal were “well above consensus forecasts,” while prices during the September quarter were better than many analysts had forecast.

“The higher quality end of the thermal coal market is experiencing stronger demand as a number of key seaborne end users are changing their quality requirements due to a greater focus on environmental and generation efficiency.

It said coal demand in China is up 8 per cent year-on-year, due to hydro electricity supply constraints and strength of underlying electricity demand. These factors have led to a larger than expected draw on the seaborne market,” it said.

Whitehaven said that on the supply side, some key factors in Australia and Indonesia had limited coal exports. “With the two largest seaborne thermal coal exporters unable to respond to the strong demand, coal prices have risen across the board,” it said.

Hard coking coal prices had also traded above expectations over recent months, Whitehaven said, but warned this could “change in the short term if steel production in China is cut during the winter months”.

Meanwhile, chief executive of copper, zinc and other base metals miner MMG, Jerry Jiao, told a Melbourne Mining Club lunch on Thursday that he believed China would lead the world in electric vehicles.

“Based on China’s dominance in solar panel manufacture, I have little doubt that electric vehicles will take off in China well ahead of the rest of the world,” he said.

Afterwards, Mr Jiao told media that the growth in electric vehicles in China would bring “huge” benefit to his company.

“The usage of copper and other base metals within an electric car, compared with a traditional car, is like six or seven times (greater),” he said.

Mr Jiao said he believed copper would be the commodity to benefit the most from the rise of electric vehicles.

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