Coking and thermal coal prices have recovered massively from their pandemic-induced lows in 2020, providing much-needed help to the Queensland economy and state budget in this time of rolling lockdowns. In the chart below are the one-month and twelve-month-ahead futures prices for coking coal, which makes up the bulk of Queensland’s coal exports. The recovery in coking coal prices will have been welcome news for the backers of the $1 billion Winchester South mine to be constructed in the Bowen Basin in coming years (Whitehaven Coal’s Winchester South mine releases draft EIS).
In the next chart are the same futures prices for thermal coal (being shipped out of Newcastle, but which should be a reasonable proxy for prices paid for Queensland thermal coal).
According to the Financial Times (Thermal coal prices soar as demand for electricity rebounds), the surging global thermal coal price is related to a big fall in hydro-power output in China as a result of a drought. The FT observes:
“The resurgence of thermal coal, which is burnt in power stations to generate electricity, highlights the difficulties governments face in trying to make the switch to cleaner forms of energy.”
In other words, all of those ambitious GHG-emission reduction targets aren’t looking achievable at the moment.
Given its warning of further hard and fast lockdowns if required (see this depressing Courier-Mail report), the state government could do immense damage to the hospitality/tourism sector over coming months, so we should be very thankful that our most important export sector, coal mining, will be benefiting from higher prices.
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Queensland Economy Watch 
High coal prices should make renewables more competitive, thus speeding up the transition to alternative fuels. Government should be ready for a quick transition, or risk being left behind.
Thanks for the comment, Katrina. Re. renewables, our federal and state policy settings are encouraging that quick transition at the moment, arguably to the detriment of the reliability of the electricity grid. That is why it’s important to consider Kerry Schott’s proposed capacity mechanism.
As for the rest of the world, there is still a large demand for coal, esp. in China and India, as reflected in current market conditions. Net zero by 2050 isn’t looking very achievable on the global scale at the moment, which is the point the FT was trying to make.