Indices on the global coal market moved up: prices in Europe edged higher alongside volatility; China saw a marked upswing; Australia also posted a moderate rise in both thermal and metallurgical coal.
Over the past week, European thermal coal indices, which had been easing to nearly 92 USD/t, started to recover on Thursday, firming to 95 USD/t amid heightened volatility. Indices drew support from the start of the heating season, lower renewable generation and higher power prices, as well as short covering.
In Germany, coal consumption is rising, and the country is discussing a postponement of tenders for new gas-fired plants on the back of delays in state-aid approval at the European Commission, increasing reliance on existing coal capacity in the near term. Medium term confidence is reflected in API2 Cal 26 futures rising and holding above 100 USD/t.
Moreover, the EU plans to ban all imports of Russian gas is a bullish driver for energy commodities (U.S. gas prices reacted with a sharp increase).
Gas quotations on the TTF hub advanced to 387.73 USD/1,000 m3 (+1.16 USD/1,000 m3 w-o-w). EU gas storage is 83% full on steady inflows versus 95% a year earlier, following active withdrawals and higher consumption. Coal stocks at ARA terminals were flat at 3.56 mio t.
South African High-CV 6,000 found support and rebounded from December 2020 lows to above 82 USD/t on firmer European prices and a technical correction. However, South African material remains under pressure amid weak import demand and downbeat expectations.
South African authorities approved an energy transition plan that keeps coal playing a significant role in the country’s energy mix through 2039. The plan envisions only a 10% reduction in coal-fired generation and commits to upgrading existing thermal power plants instead of closing them.
This policy ensures steady coal consumption by Eskom at around 100 mio t per year, providing fundamental support to the market even with soft export demand.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao continued to rise to 107 USD/t. The market shifted from sluggish activity to a pickup in demand, with domestic quotations strengthening on a mix of factors: colder weather, higher coal consumption, constrained supply amid safety inspections at mines, and weather-related logistics disruptions.
Power stations began to replenish their reserves, which rapidly translated into spot prices. After a series of minor incidents in Shanxi and Shaanxi, authorities launched a new round of inspections, prompting some producers to cut output.
Furthermore, prolonged rains and snowfalls in northern regions temporarily disrupted logistics and coal deliveries to ports.
A high probability (55–65%) of La Nina this winter could weigh on production. The National Climate Center warned key regions, including Inner Mongolia, Shaanxi and the south of the country, about possible prolonged precipitation and sharp cold snaps that could start as early as late October.
Inventories at the nine largest ports totaled 24.19 mio t (-0.30 mio t w-o-w). Stocks at the six largest coastal power plants stood at 13.80 mio t (-0.16 mio t), while consumption declined to 810 kt/day (-47 kt/day w-o-w).
Indonesian 5,900 GAR added 1 USD/t to 77.5 USD/t, while the price of 4,200 GAR moved above 45 USD/t.
After a lull at the start of the month, Indonesia’s market turned higher in the second half of October: domestic supply tightened, and Chinese demand started to recover. Indian cement and power companies also started issuing tenders after Diwali holidays, intensifying competition for Mid-CV material.
Supply was constrained as heavy rains across Kalimantan all week hampered mining and coal loading.
The government confirmed export quotas for Q4 without cutting mandatory domestic market obligations, enabling companies to export free volumes — though physically there is less because of the rains. Traders report moisture issues reaching 30%, which reduces energy content and pushes buyers to seek higher calorific, dry material.
Australian High-CV 6,000 edged slightly higher above 103 USD/t. The Australian thermal coal market was in a phase of moderate recovery: the demand from China and Japan started to rise. Supply, however, was constrained by weather and logistics. Rains in coastal New South Wales slowed shipments through the port of Newcastle.
In addition, scheduled maintenance on the Hunter Valley rail line temporarily limited volumes into the port. As a result, some exporters rescheduled deliveries, reducing the availability of spot cargoes.
Australia’s HCC metallurgical coal index stabilized near 190 USD/t after declines in the first half of October. The slide halted on the back of a pickup in Asian demand and limited supply. Rising coke prices in China also supported the import market.
Demand for PCI increased on purchases by Japan and India for Q4 2025.
Source: CCA Analysis
