World coal market: brief overview

The coal market showed mixed dynamics: prices in Europe again fell to 92 USD/t; South African quotations declined to 82 USD/t amid persistently weak interest from India; in China, the demand softened after pre-holiday purchases concluded, with prices stabilizing near 99-100 USD/t; in Australia, High-CV 6,000 rose above 104 USD/t on a revival of spot demand, while metallurgical coal edged up to 190 USD/t.

Over the past week, European thermal coal indices shed all of the previous week’s gains, dropping to 92 USD/t. Demand from European energy companies remains weak. Material for October delivery is offered at 91.5 USD/t, with November offers at 93 USD/t against bid prices around 89 USD/t. The approaching settlement date for the September contract is putting pressure on quotations. Coal stocks at ARA terminals remained virtually unchanged, holding at 3.27 mio t (-0.02 mio t w-o-w).

South African High-CV 6,000 decreased to 82 USD/t. Indian consumer interest in imported material remains subdued. This is a result of heavy rainfall across the country (following an extended monsoon season) and a renewed wave of depreciation of the Indian rupee against the US dollar. Some Indian sponge iron producers showed interest in small batches of imported coal stored at ports, where prices were stable. However, a decline in sponge iron prices over the past three months continues to constrain demand, while major producers are postponing regular purchases.

Coal inventories at Indian thermal power plants totaled 47.6 mio t (-2.1 mio t w-o-w), nearly 28% higher y-o-y. The decrease was driven by a reduction in stocks of domestically produced material to 43.8 mio t (-2.1 mio t w-o-w), while stocks of imported coal remained at 3.8 mio t. Coal-fired power generation volumes remained stable during the week.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao climbed to 100 USD/t. Purchasing activity in the domestic thermal coal market in China has weakened. Market participants’ attention has shifted back to fundamental factors after authorities refrained from further supply interventions.

Most consumers have completed stockpiling ahead of the holidays marking the founding of the People’s Republic of China (October 01), and traders have reduced speculative buying volumes. All this dampened the optimistic sentiment observed over the past two weeks. Estimates indicate that during this period, price gains for high- and medium-CV material amounted to approximately 11 USD/t in Shaanxi, 7 USD/t in Shanxi, and 6.2 USD/t in Inner Mongolia.

Some mining industry representatives believe the potential for further price growth is limited, as demand from local non-power consumers has largely been exhausted. As trading activity gradually winds down towards the end of September, inventories at mines and ports are likely to accumulate faster. Demand in coastal regions is expected to dip next month as many factories shut down for maintenance. This will further worsen market sentiment.

Market participants reported the start of preliminary negotiations for 2026 long-term coal supply contracts between Indonesian suppliers and Chinese buyers. Chinese buyers are showing greater interest in short-term quarterly contracts, hesitant to commit to full-year agreements. A number of Chinese
industrial consumers have also begun negotiations with Russian thermal coal producers for 2026 supplies.

Indonesian 5,900 GAR remained at 76.5 USD/t, while the price of 4,200 GAR firmed slightly to nearly 43 USD/t. The Indonesian government has suspended 90 coal mining permits. The formal reasons include failure to meet land reclamation obligations, pay state duties, and exceeding permitted quotas. In fact the measures are driven by the government’s desire to increase budget revenues.

It is not yet clear how significantly this will impact coal production volumes, but it could be a constructive step towards reducing oversupply. Indonesian material continues to find support from potential mining restrictions in China and seasonal output reductions due to monsoons. Some Chinese buyers are booking November deliveries after the Golden Week holidays.

Australian High-CV 6,000 rose above 104 USD/t, as some spot buyers returned to the market. Trades for 25k t November-loading cargoes were concluded at 103 USD/t and 105 USD/t FOB, with December-loading cargoes at 105.5 USD/t FOB. Queues at the port of Newcastle continue to shorten: on September 22, approximately 77 vessels were waiting at coal loading berths, compared with 80 vessels on September 15.

Australia’s HCC metallurgical coal index strengthened marginally to 190 USD/t following subdued demand from China and India.

Source: CCA Analysis