The evolution of hard coal trade in the Atlantic market

This article analyses the evolution of hard coal trade in West-Europe, known as the Atlantic market, from the 1980s to the end of 2002. It investigates the development of trade pattern, nature of contracts, price setting, supply–demand and the future of trade. The regionʹs demand has underpinned steam coal in the recent past. In 2002, steam coal imports reached 155.0 Mt, while coking coal imports were 43.2 Mt. The market is progressing to become a perfect market: transparent and simple in operation. The spot market for coal has made the transaction bring into line the current market situations. Historically, long-term contracts were usual and concluded between producer and consumer. Recently, there are still annual contracts, but with a small number of deals. The percentage of spot market has risen from 14% in 1983 to 80% in 2003. Previously, coal price settlement was referenced by South Africaʹs and the US’ offers. Now, spot price indices have become important in price setting. The increasing power needs, the advantages of reserves conditions and market systems open the opportunities for coal demand in the forthcoming years. However, these opportunities are not without problems. The demand for reducing environmental impacts and the efforts for seeking capital to fund the investment are some of the challenges to be addressed.