Global coal prices surged over the past week as geopolitical tensions and rising gas prices pushed energy markets sharply higher.
Coal prices showed divergent movements: indices in Europe surged; in China, coal became more expensive; in Australia, thermal material quotations increased, while metallurgical prices fell notably.
Over the past week, European thermal coal indices soared above 126 USD/t. At its peak, the increase reached 25%, but after a correction, the week-on-week gain stood at 20%. The move was driven by the US-Israeli military operation against Iran, which began on February 28, leading to a sharp rise in all energy prices by tens of percentage points, particularly for gas in Europe. This week, German coal-fired power plants returned to profitability (coal spreads rose from -21.10 EUR/MWh to 1.30 EUR/MWh).
Gas quotations on the TTF hub surged to 600.64 USD/1,000 m3 (+213.79 USD/1,000 m3 or +55% w-o-w) on the back of the shutdown of the world’s largest LNG plant in Qatar (QatarEnergy) and declared force majeure following Iran’s attack, as well as reports of a blockade of the Strait of Hormuz. During one trading session, prices reached 760 USD/1,000 m3. European UGS inventories fell by 1 percentage point to 30%.
South African High-CV 6,000 rose above 110 USD/t, following European prices. Support also comes from uncertainty surrounding Indonesian supplies and demand from India. However, Indian end-users offered prices below the market, expecting that a 2-3% decline this week would bring the market closer to their desired level, but a wide bid-offer spread, along with sufficient supply of both domestic and imported coal, hindered deal-making. South African coal prices appear to have become too high, and some resistance from sponge iron producers seems to be emerging.
South African authorities have included state support in their budget aimed at restoring Transnet: the rail operator will receive over 1 billion USD for coal and ore rail corridor projects and to restore Transnet’s capacity to 77 mio t of coal per year.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao strengthened to 109 USD/t. As some end-users in northern China continue to replenish stocks, few market participants expect a significant price correction in the near term. A reversal in the FOB market situation is not generally anticipated unless loading port inventories rise sharply. Mine stockpiles are generally at low levels, which in some cases is delaying coal deliveries under long-term contracts by about ten days.
China’s National Energy Administration (NEA) has called for a transition to the mass production and use of clean fuels to reduce dependence on imports, including oil, as recent geopolitical upheavals have created additional risks for the country’s energy security.
Stocks at 9 major ports increased to 25.25 mio t (+1.81 mio t w-o-w), while inventories at 6 major coastal thermal power plants decreased to 13.57 mio t (-0.25 mio t w-o-w).
Indonesian 5,900 GAR climbed to 89 USD/t, while 4,200 GAR rose to 56 USD/t. Indonesian material continues to become more expensive due to the official reduction in the country’s coal production volumes. Coal shipments from Indonesia continue to decline, falling by 10% week-on-week and 18% year-on-year. Apart from India, exports to all other major markets are shrinking as efforts focus on supplying domestic consumers. Coal exports to China fell by 20% compared to the previous week, amounting to 3.07 mio t versus 3.83 mio t, and dropped by 27% compared to the same period last year.
Indonesian authorities are finalizing 2026 coal production quotas after delays caused by plans to sharply reduce output. The Ministry of Energy proposes cutting production to 600 mio t from 817 mio t in 2025 to strengthen influence on global prices, whereas the initial target was 733 mio t. The first 15 companies have already received approval, with another 300 awaiting decisions. Some producers may lose 15–80% of their volume, while others may retain quotas but with an obligation to supply 30% of their coal to the domestic market, compared to the standard DMO rate of 25%.
Australian High-CV 6,000 surged to nearly 130 USD/t, following the overall upward trend. Mid-CV material rose to a one-year high of 88 USD/t due to supply shortages and rising prices for competing coal grades from other regions. The ongoing conflict in the Middle East also contributed to the rise, encouraging suppliers to hold firm on offer prices.
Australia’s HCC metallurgical coal index dropped to 220 USD/t, resulting from weakening demand and increased supply. Furthermore, Chinese steel mills are discussing the possibility of lowering coke prices.
Considering the expected rise in the thermal coal market, Australian mining companies note increased interest in selling semi-soft coal grades or PCI specifically into this market rather than to steel producers. These actions are expected to reduce available volumes, which will support prices in the future.
Source: CCA
