Ibrahim Kholilul Rohman and Harya S. Dillon (The Jakarta Post)
Mon, December 13 2021
The year 2022 is just around the corner and the air is crackling with hopes of a global economic recovery. After 20-plus months of succumbing to the COVID-19 pandemic, we all are looking forward to better days ahead. However, epidemiologists have yet to agree on how the new variant, Omicron, might change that optimism.
Omicron aside, markets seemed poised to ring the new year with a bang. For example, third-quarter data from Bloomberg suggests that the price of natural gas in the New York Mercantile Exchange (NYMEX) has increased by over 120 percent since January. Energy demand is a good economic indicator although at times skewed by the severity of winter in the north.
Natural gas and coal are highly substitutive. As such, soaring coal prices should not come as a surprise. Data from ICE NewCastle, the futures market for coal, suggests that prices have more than doubled within this year. Coal was priced at US$85 per metric ton in January and has been steadily increasing before peaking in the $200 range. Today, it continues to hover at the $150 range.
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