Falling oil prices and weakness in commodity currencies will provide a boost for struggling coal miners, according to the International Energy Agency, which expects global demand for coal to slow over the next five years.
The price of coal has continued to fall this year as demand has weakened and producers in Australia and Indonesia have increased output in an effort to push down unit costs.
Benchmark Australian thermal coal, which is used in power generation, has fallen 25 per cent to $61 a tonne, while metallurgical coal, a steelmaking ingredient, is down by more than 16 per cent. Coal makes up a large share of production for global mining houses such as Glencore and Rio Tinto, for which a recovery in prices would provide a significant boost in profitability.