Global coal prices showed mixed trends last week across Europe, China, Indonesia, South Africa and Australia.
Last week, the coal market saw mixed trends: indices in Europe rebounded; Chinese coal corrected downward; in Australia, thermal material prices declined, while metallurgical coal quotations were moving in opposite directions.
In the European coal market, quotations corrected higher to 119-120 USD/t after a significant decline the previous week. Coal found support from an exceptional heatwave in Europe, which drove up electricity prices and reduced nuclear generation. Wind generation also fell, supporting power prices.
Renewables’ share in Germany dropped from 70% to 61%, while the share of fossil fuels rose from 30% to 39%. Average German electricity prices climbed to nearly 144 EUR/MWh, compared with 131 EUR/MWh last week, driven by higher air conditioning demand. Temperatures are expected to remain significantly above seasonal norms.
Gas quotations on the TTF hub fell over the week to 477.09 USD/1,000 m3 (-10.05 USD/1,000 m3 w-o-w). EU underground gas storage rose 2 ppts to 47%, notably below last year’s level of 56%. Coal stocks at ARA terminals edged up to 3.89 mio t (+0.05 mio t w-o-w).
South African High-CV 6,000 tumbled to 103 USD/t, hitting a 2-month low. Pressure on quotations comes from factors such as progress in the US-Iran truce and Indian sponge iron producers switching to domestic coal.
Prices on the Chinese domestic market corrected slightly below 127 USD/t amid rising inventories, slowing trading activity in mining regions and loading ports, and falling import coal prices that have become even more competitive compared with domestic material. Market participants increasingly agree the market is likely entering a prolonged correction phase.
El Nino-driven demand expectations have not materialized so far — weather conditions in China have been milder than anticipated, failing to generate significant coal consumption growth. Rainfall over the next ten days in most Chinese regions is forecasted to be 30–60% above seasonal norms, and in some areas at least double. Meanwhile, major coal-producing provinces, including Shanxi, have stated their readiness to increase output in compliance with central government directives to ensure demand is met during the summer.
Coal stocks at 9 major ports edged down to 28.46 mio t (+0.13 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 14.32 mio t (+0.35 mio t w-o-w).
Indonesian 5,900 GAR fell below 109 USD/t, while the price of 4,200 GAR dropped to 66 USD/t. The upward trend in Indonesian material quotations paused amid weakening demand. Indian buyers adopted a wait-and-see stance, and the bulk of restocking in China is already complete, prompting traders to actively liquidate positions. Market premiums for Indonesian mid- and high-CV coal narrowed, given deteriorating demand and stabilizing prices for alternative fuels.
Indonesian producers have redirected part of their supply to the domestic market to meet the needs of PLN’s power plants. Indonesian authorities have required mining companies to ramp up deliveries to major power plants on Java island, as coal stocks at several stations have reached critically low levels. This has raised concerns among market participants that the government may restrict or suspend export shipments within a matter of days.
Australian High-CV 6,000 continued to decline, falling below 134 USD/t, as geopolitical tensions eased and buyers adopted a wait-and-see stance in anticipation of further price declines.
Japanese utility JERA halted Unit No. 5 at its Hirono coal-fired power plant on June 21, caused by boiler equipment issues. Additionally, on June 22, JERA restricted output at the 700-MW coal-fired Unit No. 2 at its Hekinan power station due to a similar problem. The company did not provide a timeline for restoring normal operations.
The metallurgical coal market showed mixed dynamics: Australia’s HCC metallurgical coal index edged down to 243.50 USD/t, while the Low Vol PCI FOB Australia lost 1 USD/t to 170 USD/t FOB Australia.
Trading activity remained low, with participants noting limited supply availability and steady demand in China for premium HCC coal.
Steady demand in China, stable domestic prices, and lower freight rates could prompt traders to raise FOB prices. However, some participants expect FOB quotations may face pressure as Chinese supply gradually increases with production recovery, while demand in India remains constrained.
Source: CCA
