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International Coal Trade: The Evolution of a Global Market
International Coal Trade The Evolution of a Global Market Author:Iea, John Cameron The international coal market has developed over the last 25 years to a mature stable market, largely free of government involvement. It is evident, however, that while the coal market is considered widely to be reliable and mature, there is only limited understanding of the way in which the market operates. Understanding energy market... more » mechanisms is fundamental to encourage confidence in the continuing performance of liberalized markets. This publication seeks to address this need by providing a brief descriptive analysis of the operation of the coal market. The report draws attention to the considerable changes that have been experienced to date in the market, where freely operating market mechanisms have coped well. Further change is on the horizon. Coal demand in Europe is stagnating while growing rapidly in Asia. The once-dominant European market remains the region where price is formed but he Asian market is growing rapidly and becoming more flexible. Increasing competition for market share, low margins, and pressure on utilities to reduce costs as electricity markets are liberalized, will continue to stimulate productivity improvement and may lead to innovations in marketing to cope with stable real prices, high transport, and transaction costs. "...Upon final publication, the report will be the single best explanation of the international coal market available. I only wish that I could find a way to compel officials in my government to read it." Blair M. Gardner, Assistant General Counsel and Director, Governmental Affairs, Arch Coal Inc. "...this document makes an important contribution to the knowledge of how markets work in international coal trade." William A. Bruno, V.P. Corporate Planning, Consol Inc.« less