Market Structure Scenarios in International Steam Coal Trade

Johannes Trueby and Moritz Paulus (moritz.paulus@web.de)

No 2011-2, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)

Abstract: The seaborne steam coal market changed in recent years. Trade volumes grew dynamically, important players emerged and since 2007 prices increased significantly and remained relatively high since then. In this paper we analyse market equilibria in the years 2006 and 2008 by testing for two possible market structure scenarios in this market: perfect competition and an oligopoly setup with major exporters competing in quantities. We conclude from our results that international steam coal trade is not perfectly competitive as there is a large spread between marginal costs and prices and a low capacity utilisation in 2008. Further, trade flows are generally more diversified in reality than in the competitive scenario. However, also the Cournot scenarios fail to accurately explain real market outcomes. We conclude that only more sophisticated models of strategic behaviour can predict market equilibria in international steam coal trade.

Keywords: Steam coal trade; Mining Costs; Market Structure (search for similar items in EconPapers)
JEL-codes: C61 L11 L71 Q31 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-04-12
New Economics Papers: this item is included in nep-bec, nep-com and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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Related works:
Journal Article: Market Structure Scenarios in International Steam Coal Trade (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ewikln:2011_002

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