LONDON, May 31, 2017 /PRNewswire/ --
Extremely high and volatile metallurgical coal prices since mid-2016 have, after 3-4 years of scrutiny on cost reduction, shifted the focus of the industry away from costs of production - with spot prices spiking to ~200% above average costs of the industry, as they have done twice in the last year or so, changes to operating costs have, inevitably, seemed of little importance.
However, in a competitive industry such as coal mining, prices do not disconnect from costs for long. Equally, while changes to costs that occur now will have little impact on the bottom line of producers in the short-term, they will affect decisions around future supply and, ultimately, where metallurgical coal prices settle under more steady-state conditions.
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SOURCE CRU Insight