Coal Drop to 7-Year Low on Oil and Dollar Overdone, SocGen Says
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Coal’s drop to a seven-year low may be “overdone” as the price reacted more to macroeconomic and currency swings than supply and demand, according to Societe Generale SA.
A strengthening of the dollar compared with the currencies of coal-producing nations has reduced costs for miners, allowing them to sell at lower prices, while bearish economic sentiment has reduced interest in trading the mineral, Paolo Coghe, an analyst at Societe Generale in Paris, said in a report published today. Coal prices fell 25 percent in Australia, 22 percent in South Africa and 13 percent in Colombia last year.