Glencore cuts Cerrejon coal in effort to bolster prices

GLENCORE said on Tuesday it would cut production from its Cerrejon coal mine in production in an effort to arrest a decilne in prices for the fuel.It will produce between five to 10 million tons less coal than previously expected at Cerrejon which will produce between 11 to 16 million tons this year.“The rationale for the cut is primarily driven by the unsustainable prices for seaborne thermal coal,” Glencore said in a Bloomberg News article.Glencore has a long history of pulling back production when prices are weak and said earlier this year it was prepared to act to support one of its most important commodities, the newswire said.Australia’s Newcastle coal futures have fallen to around $100 a ton, down about 20% since the start of the year. They hit a record of over $450 a ton in September 2022, following Russia’s invasion of Ukraine, said Bloomberg News. Mining has boomed since then on the back of spiking prices and energy security fears.According to analysts, the outlook for thermal and metallurgical coal, is muted. “We see no signs of price recovery in the near term,” Bank of America says of China’s coal market, which at about 219 million tons (Mt) represents a fifth of all seaborne trade in 2024.The company, which posted record profits just two years ago, cashing in on the global energy crisis, has since seen earnings decline. Glencore previously said it will produce between 92 million and 100 million tons of coal this year.Despite this Glencore CEO Gary Nagle is upbeat on the prospects for coal. “Coal is no longer a four-letter word,” he said at the firm’s year-end presentation in February. “In today’s world, the pendulum has swung back and recognises that energy coal is needed as the world transitions.”“As renewables advance, it is worth noting that the engine of the global economy is moving away from China towards India and Southeast Asia,” said Bank of America.The share of global coal demand consumed in ‘developing’ Asia rose again in 2024, reaching nearly four-fifths, up from below two-fifths in 2000, according to a recent review by the International Energy Agency (IEA).In China, coal demand grew by 1.2% (43Mt) in 2024, reaching a new all-time high. “The country now consumes nearly 40% more coal than the rest of the world combined, largely for power generation,” said the IEA.All in all, coal demand grew by 1.1% in 2024 in energy terms, rising by around 67Mt of coal equivalent (Mtce) (or in physical terms by 1.4% or 123Mt), the agency said.The post Glencore cuts Cerrejon coal in effort to bolster prices appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com