CEY 0.00% $6.16 centennial coal company limited

lz, the demand and trend to using coal over oil will continue...

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    lz, the demand and trend to using coal over oil will continue whilst the world economy is strong. Improvements in technology means it is more efficient and cleaner to burn than it ever was and as oil deposits are becoming increasingly difficult to access, modern machinery is making coal easier. Transportation of coal however is dependant on oil and this becomes a limiting factor on where coal can be transported economicaly. For instance, it is cheaper to land Asian coal on the USA southern and eastern seaboards than coal from the Powder River basin in Wyoming. The cost per tonne of shipping that coal halfway around the world is similiar to the cost of trucking it about 100 km. Thus availability of coal for world trade is dependant on the proximity to the coast.
    As for the relationship between the price of oil and coal, look again. Coal was unpopular for a long time but since the resurgence in it's use, power generators building new power plants design their plants to use whatever happens to be the most economical and reliable supply of fuel and generally that comes down to oil or coal. Increasing numbers of plants have been built to fire coal, some designed specifically for the characteristics of certain coal deposits. These plants are intended to be used for perhaps 50 years so that ensures a certain demand for that period.
    It seems to me that we shall see more and more demand for steaming coal to provide power whilst oil becomes increasingly used for transportation. However given that both are alternate fuels in steam generation their demand and price is always going to be linked.
 
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