Low prices have a mixed effect on the production of raw materials. Metals like gold and ore continue to be produced in the previous levels - as if there was no drawdown - Materials AMarkets.
Thus, the largest producer of iron ore from Australia and Brazil are currently mined materials in record volumes, despite falling prices.
Other metals - such as copper and platinum, on the contrary, show a slowdown of production. As shown by the latest statistics, one asset class shows particularly vivid reaction to the drop in prices. This thermal coal.
At the start of last week, the largest producer and exporter of coal Indonesia reported significant contraction of production. From January to August production levels fell to 15.4% when compared to the same period in 2014.Total for the period were made 263 million against 311 million last year. Indonesian exporters already nedopostavili the global market of nearly 50 million tons of coal. It is expected that due to compression of the entire Indonesian exports in 2015 in the coal market will be less than 75 million tons. For the global market is essential. Especially considering the fact that Indonesia - a region of the cheapest coal due to low production costs.
Almost 80% of all coal producers in Indonesia squeeze release of raw materials, which become less profitable when the price level of $ 58 per ton. At the same time until the compression levels of coal production in the country grew 66% rate per year for 5 years interval.
What can we expect if the trend will continue? Probably, the growth in coal prices.