Surge in coal prices

Coal prices have surged to record levels, according to BBC news. According to one trader, "supply is so tight at the moment that users just have to pay whatever producers are asking, and if they sit around and wait, they will either have to fork out even higher prices or be told there is no more tonnage available".

1. Read the article and think about why supply is so tight.
2. Draw a demand and supply diagram to show how the equlibrium price has changed.
3. Identify other markets that are likely to be affected by the increase in coal prices.

http://news.bbc.co.uk/1/hi/business/7225682.stm