The Globalization of Steam Coal Markets and the Role of Logistics: An Empirical Analysis

Posted: 20 Dec 2009

See all articles by Aleksandar Zaklan

Aleksandar Zaklan

German Institute for Economic Research (DIW Berlin)

Astrid Cullmann

German Institute for Economic Research (DIW Berlin)

Anne Neumann

German Institute for Economic Research (DIW Berlin)

Christian von Hirschhausen

German Institute for Economic Research (DIW Berlin) - Department of International Economics

Date Written: December 2009

Abstract

In this paper, we provide a comprehensive multivariate cointegration analysis of three parts of the steam coal value chain - export, transport and import prices. The analysis is based on a rich dataset of international coal prices; in particular, we combine data on steam coal prices with freight rates, covering the period December 2001 until August 2009 at weekly frequency. We then test whether the demand and supply side components of steam coal trade are consistently integrated with one another. In addition, export and import prices as well as freight rates for individual trading routes, across regions and globally are combined. We find evidence of significant yet incomplete integration. We also find heterogeneous short-term dynamics of individual markets. Furthermore, we examine whether logistics enter coal price dynamics through transportation costs, which are mainly determined by oil prices. Our results suggest that this is generally not the case.

Keywords: Steam coal, market integration, multivariate cointegration

JEL Classification: L11, Q41, C22

Suggested Citation

Zaklan, Aleksandar and Cullmann, Astrid and Neumann, Anne and von Hirschhausen, Christian, The Globalization of Steam Coal Markets and the Role of Logistics: An Empirical Analysis (December 2009). DIW Berlin Discussion Paper No. 956, Available at SSRN: https://ssrn.com/abstract=1523738 or http://dx.doi.org/10.2139/ssrn.1523738

Aleksandar Zaklan (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Astrid Cullmann

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Anne Neumann

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Christian Von Hirschhausen

German Institute for Economic Research (DIW Berlin) - Department of International Economics ( email )

Mohrenstraße 58
Berlin, 10117
Germany
+49-30-89789-343 (Phone)
+49/30/897 89 -200 (Fax)

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