Irrespective of the price retracement in the last two months, global coal price has remained high even after rallying more than 30% from the low of US$92 per ton in the month of April to about US$120 per ton in the month of July.

In between July and October, the average coal price has been US$116.43 per ton in comparison to the US$103.42 per ton on an average in between January and June. In the month of July, the Australian thermal coal prices have broken through US$120-per-ton for the first time since the year2012 that is driven by a strong consumption in Asia.

The spot price for the thermal coal in Newcastle of Australia had been quoted US$112.15 per ton. The rally of coal price is proving to be a headache for the power-generating companies like Tenaga Nasional Bhd and various other independent power producers like coal that is imported 100% in the main source in a generation of electricity in Peninsular Malaysia.

According to analysts the price of coal has risen by one-fifth in the last 6 months and hasn’t fallen much in 6 years high of around US$120 per ton. The analysts are also known to believe that in case the coal price is strong throughout the rest of the months, there might be another surcharge for the next 6 months for sure as rebates that are offered by the government are unsustainable when gas and coal prices keep increasing.

Coal plays a major role in the energy scheme for Malaysia with about 62% being imported from Indonesia and 24% from Australia and the rest of Russia and South Africa. The power generation of Peninsular Malaysia is largely dependent on fossil fuel having 53% coal, 5% hydro, 42% natural gas along with the other forms of renewable energy.

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