# Coal mining: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/energy/e_coal_mining/correlation/ Coal mining costs are labour, diesel, explosives, equipment and rail transport, while prices are set by power and steel demand. In India and the US much coal is sold on long contracts to utilities, so mine prices move more slowly than export prices. Price index **US PPI: coal mining** index (BLS base period =100) · monthly, Jan 2006 to Sep 2026 #### What its price moves with Selected link ##### Coal mining and Thermal coal Monthly changes 0.09 little or none correlation 12-month changes 0.48 moderate correlation Last 5 years 0.09 monthly changes Lead or lag +1 mo Thermal coal tends to lead by 1 month (r 0.16) Price function, Jan 2006 to Sep 2026 Coal mining ≈ 45.2 × (Thermal coal)^0.33 R² 0.41 On this fit, a 10% higher thermal coal price goes with a 3.2% higher coal mining price over the long run. Units: index (BLS base period =100) and $/mt. Chart: Coal mining and Thermal coal prices rebased to 100 at Jan 2006, log scale Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size. Chart: Coal mining price against Thermal coal price, monthly, log scales, with fitted line Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic. Energy [Tc Thermal coal](https://www.materialinsights.org/energy/thermal_coal/)Product 0.09 Mines sell thermal coal to power stations. The US coal mining price index moves slowly as US coal is sold on long utility contracts, so it links only loosely to the Australian export price: monthly moves correlate at 0.09 and yearly moves at 0.48. little or none co-movement month to month · 249 months Show charts Energy [Kc Coking coal](https://www.materialinsights.org/energy/coking_coal/)Product 0.09 Coking coal from the same basins feeds steel blast furnaces and sells at a premium. The coking coal proxy here is the Australian thermal coal price, so its statistics are the same as thermal coal and add nothing. little or none co-movement month to month · 249 months Show charts Chemical [AN Ammonium nitrate](https://www.materialinsights.org/chemicals/ammonium_nitrate/)Mining input 0.08 Most surface coal mines blast overburden with ammonium nitrate explosives. The US fertiliser and coal mining indices show almost no monthly link (0.08) but a moderate yearly one (0.44), partly through the shared gas and energy cycle. little or none co-movement month to month · 249 months Show charts Energy [Agr Energy in farming](https://www.materialinsights.org/energy/e_agri_energy/)Fuel cost 0.14 Trucks, shovels and dozers in open-pit mines run on diesel, a large running cost. The diesel index and coal mining index correlate at 0.14 monthly and 0.30 over a year. little or none co-movement month to month · 249 months Show charts Energy [CT Coal transport](https://www.materialinsights.org/energy/e_coal_transport/)Delivery cost 0.16 Rail carries most coal from mine to power station in India and the US, and freight is often a large part of delivered cost. The US rail index and the coal index correlate at 0.16 monthly and 0.50 yearly. little or none co-movement month to month · 249 months Show charts Energy [Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)Rival fuel −0.00 Coal competes with gas for power generation, and cheap shale gas cut US coal demand. The European gas price and US coal index show no monthly link (0.00) but a yearly link at 0.42. little or none co-movement month to month · 249 months Show charts How to read these numbers **Correlation of monthly changes** (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak. **12-month changes** compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs. **Price function** is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)^β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation. **Lead or lag** checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months. Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link. Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site. ## Other sections - [Summary](https://www.materialinsights.org/energy/e_coal_mining/index.md) - [Overview](https://www.materialinsights.org/energy/e_coal_mining/overview/index.md) - [Efficiency](https://www.materialinsights.org/energy/e_coal_mining/efficiency/index.md) - [Techniques](https://www.materialinsights.org/energy/e_coal_mining/techniques/index.md) - [Resources and labour](https://www.materialinsights.org/energy/e_coal_mining/resources/index.md) - [Impact on the biosphere](https://www.materialinsights.org/energy/e_coal_mining/biosphere/index.md) - [Relationships](https://www.materialinsights.org/energy/e_coal_mining/links/index.md)