Thermal coal prices have hit a three year high reaching $US109/tonne on May 31.
This the highest price paid for the commodity since 2018 when the price reached nearly $US120/tonne in July of that year.
This is good news for the Hunter's coal producers who were hit badly last year during the COVID lockdown when prices slumped to $US50/tonne.
At that time the Glencore placed its Hunter open cut mines into a six week shutdown and Peabody Energy cut its Wambo underground workforce in half as a major cost saving measure.
In contrast to 2020 when demand fell away as international markets reduced orders due to drop in economic activity caused by the pandemic this year with the economy on the rebound coal demand has also rebounded and along with that has come the significant price increase.
This is particularly so in China where Forbes reported strong demand for power in China coupled with a slowdown in local coal production has combined with a ban on Australian coal imports to create perfect conditions for the price to continue rising.
The unexpected coal-price revival has sparked a recovery in the share prices of Australian coal mining companies which have been able to find markets to replace China, they reported.
Now the question is how long are these prices likely to stay at this level?
Coal remains the number one fuel for power generation as it remains the more competitively prices than gas.
But the push by governments particularly our major coal uses in Asia - Japan and Korea to achieve net zero emissions by 2050 raises concerns about longterm prices.