"Coal Keeps Sliding As OPEC-Like Tactic Stymied By Dollar"

"CHICAGO — Coal prices, already down 52 percent since 2011, are forecast to keep falling. The rout shows that exporters’ OPEC-like tactics of trying to squeeze out high-cost producers have been frustrated by the rising dollar.

Miners from Colombia to Australia maintained output as prices fell for a fourth year in 2014 amid a global glut of seaborne coal that Deutsche Bank says is poised to triple this year. A 19 percent jump since July in the Intercontinental Exchange’s dollar index, which tracks the greenback against 10 major peers, has helped companies that extract the power-plant fuel whose costs are measured in local currencies.

The approach is comparable to that of the Organization of Petroleum Exporting Countries (OPEC), the 12-member group that agreed in November to keep output unchanged even as a 49 percent slump in crude in the second half tested the ability of U.S. drillers to keep pumping. U.S. coal producers, who are exposed rather than protected by the rising dollar, are cutting output, while the Russians have been the biggest beneficiaries as the ruble’s decline has made them among the lowest-cost producers."

Alessandro Vitelli, Ben Sharples, and Mario Parker report for Bloomberg News January 31, 2015.

SEE ALSO:

"Coal Industry Waits For Market To Turn" (St. Louis Post-Dispatch)

"Dig This: China Cuts Coal Production" (Scientific American)

"China Nears Peak Coal, But Its Rustbelt Pays the Price" (World Post)