Coal-price hike is a short-term problem

Implications: Recent hikes in coal prices in international market have caused significant worries among people. They believe that coal will follow oil and become another very expensive commodity. Such worry is unnecessary.

Analysis: World-wide oil production is very close or has past the production peak. There is growing difficulties in finding new oil resources. But there is plenty of coal underground in the world.  Mining, transportation are normally the bottlenecks in coal market. Different countries have different bottleneck. For instance, in China, transportation has been a chronic problem in coal supply chain. But it has been factored in the "real" coal price including the bribes that coal buyers normally have to pay. Thousands of small coal mines serve as a buffer zone. When the supply is low, Chinese government allow some of them to reopen and the enforcement of policies that close them down become less vigorously.  Infrastructure investment can alleviate these problems.