Abstract
The paper presents the relationships between coal prices on the domestic market in Poland and prices of coal and natural gas on the international market. The analyses use the ARDL model. Long-term linkages were analysed with the bounds test, while short-term adjustments - with unconditional ECM models. The obtained results indicate a clear hierarchy of markets. Coal prices on the Polish market were not cointegrated with natural gas prices and they were relatively poorly integrated with coal prices on the international market. Coal prices exported from Poland and international prices were connected more strongly. The strongest relationships were stated between coal and gas prices on the international market. At that level, coal prices behaved in a manner characteristic to the global market. Keywords: Coal, prices, integration, international market, domestic market, Poland JEL Classifications: C22, F14, Q41 DOI: https://doi.org/10.32479/ijeep.9393
Highlights
Integration testing was based on testing of relationships between coal prices on the Polish market and prices on foreign markets
The presented data indicated that the AUS and ICE coal prices were similar throughout the analysed period, while prices on the Polish market showed significant differences in prices on the international market through the majority of the studied period
Export prices of the Polish coal were much higher than the AUS and ICE prices, while prices on the domestic market were usually similar or lower
Summary
Coal and natural gas have the largest share in the consumption of primary energy. Demand for these products is not shaped by the same factors and they do not constitute perfect substitutes. Transportation costs, domestic and transnational regulations, deviations from excellent competition result in separation of domestic and local markets. These factors cause an increase in price differences among particular markets and weaken linkages among price changes. The natural gas consumption has significantly increased It becomes more and more popular among others due to the pursuit of reduced carbon emissions. Global conditions for the market of coal and natural gas have become much more important
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