Coal prices have surged, topping oil, LNG, copper gains in 2016.
Many a swan song has been sung for thermal coal markets as renewable power generation and a push towards using more natural gas have gained traction.
Yet a coal price spike last year, driven by a Chinese change in regulation that capped local mining operations, has shown how easily markets can swing from oversupply to shortfall.
While many analysts and investors see the long-term outlook for coal as bleak due to policies and technological advances that favour cleaner natural gas and renewable in power generation, its shorter-term prospects has seen a sharp reversal of fortunes.
"We are pleased to see the improvement in thermal coal market dynamics on the back of supply cuts in China and sustained demand," said Febriati Nadira, head of corporate communication at Indonesian mining major PT Adaro Energy .
China's coal imports jumped 64 percent in January from a year earlier, to 24.91 million tonnes, one of the highest in years, official customs data showed on Friday.
This year, strong demand growth in Asia's emerging markets will create a supply shortfall for the first time in around half a decade. Consumption could even soon rise past the 2014 peak, according to Asia's largest commodity trading house, Noble Group (NOBGF)
Despite coal's high levels of pollution, utilities and governments in emerging economies, at least for now, largely prefer coal-fired power over cleaner fuels in order to meet soaring energy demand.
While gas and solar prices have fallen sharply, coal remains one of the cheapest and most easily maintained sources of electricity.
More than 10 gigawatt (GW) of coal-fired power stations were sanctioned last year in Southeast Asia, where most new demand stems from, compared to just 4.6 GW of gas-fired projects, according to energy consultancy Wood Mackenzie.
"New markets like the Philippines and Vietnam are starting to seek our coal," the chief executive of Indonesian coal miner PT Bukit Asam, Arviyan Arifin, told Reuters this week.
Rodrigo Echeverri, head of thermal coal analysis at Noble, believes this year's global thermal coal market will be 13 million tonnes short of meeting 911 million tonnes of demand, compared with a broadly balanced market in the last three years.
The tightness is a result of falling output after some companies including U.S. giant Peabody Energy (BTU)
, filed for bankruptcy, and other miners cut output at unprofitable mines.
At the same time, Chinese imports grew by 43 million tonnes as a result of restrictions on local production, while new coal-fired power plants were commissioned in countries including Vietnam, Malaysia, Philippines, Taiwan, Echeverri told a conference in South Africa this month.
To meet the imminent shortfall, some miners have again begun ramping up output.
Indonesia, the world's biggest thermal coal exporter, said this month it is targeting production of 470 million tonnes in 2017, compared with its previous goal of 413 million tonnes and up more than 8 percent on last year.
There are also signs that Australian thermal coal output is picking up, with exports from Queensland hitting a record last year.
Even so, the shortfall in supply could reach 28 million tonnes by 2020, meaning more new mines would need to be opened by the mid-2020s to meet demand, Echeverri said.
Most commodities, including thermal coal, crude oil, copper or liquefied natural gas <LNG-AS>, have seen price rises since early 2016 as part of a broad-based rally.
Australian thermal coal has performed best, rising 53 percent price versus 48 percent for oil, 25 percent for copper, and just 8 percent for Asian LNG.
Because of this, companies focusing on seaborne coal supplies fared better than other miners or oil and gas producers.
"For pure coal players, the rise in prices from June 2016 ... provided the catalyst for improved export sales margins given that many producers were actively managing their production costs," said Patrick Markey, managing director of commodity advisory Sierra Vista Resources in Singapore.
This reversal of fortune of an industry that was deeply in trouble just a year ago has been noted by investors.
Shares in thermal coal specialists like Australia's Whitehaven Coal or Indonesia's Adaro Energy, are far outperforming their peers in the oil and gas sector like Australia's Woodside Petroleum (WOPEF)
, Royal Dutch Shell (RYDAF)
or Chevron (CVX)
Many oil and gas firms are grappling with cost overruns and production delays at facilities such as Chevron's Wheatstone condensate and LNG plant or Shell's Prelude floating LNG unit.
Longer term, the rise of cheap natural gas and increasingly competitively priced renewable power generation is expected to eat away at coal's power market share.
"We see clear winners for the next 25 years – natural gas but especially wind and solar – replacing the champion of the previous 25 years, coal," the latest outlook from International Energy Agency (IEA) says.
In the meantime, producers are benefiting from Beijing's ongoing drive to remove dirty and inefficient mines, which is keeping seaborne coal prices in a sweet spot.
"Around $80 is a really, really good price for Australian mines," said Peter O'Connor, resources analyst for brokerage Shaw and Partners in Sydney.
By Henning Gloystein