Thursday, July 03, 2008
coal price collapse
that may have ended yesterday.
While no one has seen such a sudden fall in the price of coal for years, analysts are insisting that this is nothing to worry about. As Gordon Howald of Caylon Securities told Reuters:
We have been waiting for a correction for months…It is a correction and not a big deal…Nothing has changed in the global coal picture.
But that’s not quite what the price is saying.
Jitters seem to have been triggered by reports that Asian steelmakers were refusing to pay latest coal prices - complaining (with some justification, no doubt) that they were not able to pass on inflated costs to their own customers.
this has very little look of a wage-price spiral -- indeed, it looks at first approximation like rising prices colliding with falling wages and turning back.