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Coal prices are soaring, weight on the global economy

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On the 13th (local time), Deutsche Welle (DW) reported that Asian nations are trying to avert a pre-winter catastrophe due to rising oil, natural gas and coal prices. The Asian economy is not immune to the effects of rapidly rising energy prices either.

Energy prices, especially coal for power generation, are on the rise, putting a strain on the Asian economy.

coal prices are soaring

IHS Asia-Pacific chief economist Rajiv Kit bis said, “Some factories in China and India are more dependent on the logistics of imported coal, which is why they are vulnerable to rising prices.”.

In China, cement, steel, aluminum, and some industries are cutting production, such as coal, etc. “All of these measures are a result of a decrease in electricity supply due to rising coal prices,” said an analyst at the IEEFA. “However, this year, there was no incentive to increase production because of the decline in profitability.”

Indonesia, which produces the most coal for power generation, benefited from a rise in coal demand in Asia, he explained.

According to a report undertaken by German environmental group Urgewald, nearly half of the world’s coal producers have increased production. Coal-fired power generation has increased over the past six years. The report states that production increased by 157 GW over last year and is forecast to reach 480 GW, mostly in Asia.

Carbon neutrality objectives

To meet its carbon neutral objectives by 2060, China will need to reduce coal demand by more than 80%. “There is still a long way to go.”

In Cambodia, coal will generate about 75% of the total country electricity by 2030, doubling its current capacity. Meanwhile, Bangladesh and the Philippines are starting to build coal plants again.

IHS Markit’s Biswas predicted that coal will remain a mainstay of power generation, particularly in China, India, and Indonesia. “A transition to clean energy will be possible in the medium term”.

For MetaNews.

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Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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