Coal trading is poised to rise to an all-time high this year as prices at less than half their 2008 peak stoke demand, defying government efforts to phase out the most-polluting fossil fuel.
The volume of coal derivatives bought and sold around the world may jump as much as 46 percent this year to 2.3 billion metric tons, based on data from exchanges and brokers, according to Guillaume Perret, founder of Perret Associates Ltd. and a former trader at RWE AG, Germany’s second-biggest utility. That would exceed the record 2.2 billion tons traded in 2007.
“It’s looking pretty good for coal,” Kris Voorspools, director of 70Watt Capital Management, a Luxembourg-based hedge fund that specializes in trading spreads in energy and carbon markets, said in an Aug. 24 interview. “It’s the fuel for the developing world. China and India are using it to grow.”
The increase in coal trading underscores how fuel demand in Asia is hampering government measures to tackle global warming. United Nations Climate Chief Christiana Figueres said on June 9 negotiations to extend Kyoto Protocol limits on greenhouse-gas emissions are unlikely to succeed this year. Global coal demand held near a record in 2009, while oil consumption dropped 1.7 percent and natural-gas use fell 2.1 percent, according to BP Plc’s June 2010 Statistical Review.