Global coal prices correct as Europe, China and Australia weaken

Global coal prices underwent a downward correction over the past week as European, Chinese and Australian markets weakened amid changing supply and demand conditions.

Last week, the coal market saw a downward correction. Indices in Europe declined, coal in China edged lower, in Australia thermal material quotations fell, while metallurgical coal prices moved in different directions.

European thermal coal quotations hit a 3-year high of 150.66 USD/t over the past week but then rolled back below 145 USD/t. Pressure on European coal came from a sharp surge in wind generation: in Germany – up 87% w-o-w (the highest level of the year), in Spain – up 24%, and in Italy and Portugal – up 21%.

This more than offset the decline in solar generation and rising power demand, so that despite higher gas prices, average electricity prices in Germany and other EU countries fell 26-29% compared with the previous week. However, wind generation is expected to decline across all major markets this week, with electricity prices rising.

Meanwhile, gas and oil markets continue to find support from factors such as low gas inventories, forecasts of colder weather in November, and US preparations for additional military measures against Iran. Brent crude is holding near a six-month high (around 117 USD/bbl).

Gas quotations on the TTF hub as of October 29, 2026, reached their highest level since 2022, gaining nearly 12% to 1,138.27 USD/1,000 m3 (+90.19 USD/1,000 m3 w-o-w). Total EU underground gas storage stood at 74.9% (+0.3 ppts w-o-w), 8.1 ppts below last year’s level of 83%.

South African High-CV 6,000 reached its highest level since October 2023 but corrected below 130 USD/t by the end of the week, while 5,500 material rose above 116 USD/t. Quotations were supported by rising demand from South Korean power utilities, which are shifting towards South African material, seeing greater value in it than in Indonesian coal.

In India, interest in South African coal from sponge iron and cement producers remained weak because of high prices, while cement and sponge iron prices have not risen like the raw material, making output expansion unprofitable. Many Indian buyers expect a price correction and are drawing on accumulated port inventories, whose build-up reflects reduced consumer purchasing amid rupee weakness.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao stood at 153 USD/t, declining for the first time since mid-September, amid increased supply and limited demand. Additionally, the market expects a significant increase in Shanxi production from November, though its scale and timing remain uncertain; constraints include small mines exhausting monthly production quotas and the temporary suspension of a few mines in Shenmu (Shaanxi province) for a political event on October 26-29.

Maintenance on the Daqin rail line was completed on October 24 (two days ahead of schedule), and rail deliveries recovered to 1.2-1.3 mio t/day versus an average of 0.97 mio t/day during the maintenance period (October 6-24). In October, average daily rail coal shipments in China rose 4.7% m-o-m to 85.1k wagons (about 5.96 mio t/day). As a result, several major power companies (China Datang, China Energy, Huaneng) slowed or suspended import tenders.

Shenhua cut procurement prices for third-party coal several times – by a combined 25-40 yuan/t. Small mines followed suit and also lowered prices. Some suppliers still expect a demand revival in November as inventories build ahead of winter.

Coal stocks at 9 major ports fell to 24.61 mio t (-0.77 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 14.59 mio t (+0.01 mio t w-o-w).

Indonesian 5,900 GAR strengthened to 124 USD/t, while the price of 4,200 GAR corrected to 78 USD/t.

Indonesian sellers held prices high despite weakening demand from China and India. Supply remains constrained: recent rains in Kalimantan and Sumatra were moderate and did not resolve the low river level problem. One producer reported high-CV coal sold out through year-end; suppliers are seeking a 15-16 USD/t premium for 5,900 GAR coal, meeting buyer resistance. Steady interest in mid-CV coal persists from Vietnam, Cambodia, and Bangladesh.

Mining companies are busy submitting applications for 2027 RKAB quotas, and market participants generally expect the total 2027 production quota to be somewhat above the current level. Since the start of the year, exports have declined 13% y-o-y to 355.2 mio t.

Australian High-CV 6,000 fell below 152 USD/t after gains in previous weeks. Chinese interest in Australian coal declined markedly, though buyers still see relative value in Australian material amid high domestic prices in China.

Prices for premium metallurgical coal HCC and PCI moved in different directions. Australia’s HCC metallurgical coal index declined to 265 USD/t, while Low Vol PCI exceeded 200 USD/t.

HCC quotations corrected lower, resulting from weak demand in China and India. Chinese steel mills are favoring port inventories and spot cargoes; some pressure also comes from unsold November mid-volatile cargoes, as well as expectations of a production recovery in China (mines are restarting in Shanxi, with further restarts expected in November) and truck shipments from Mongolia. Indian buyers are in no hurry to purchase, expecting prices to decline amid ample supply.

At the same time, some market participants expect demand to gradually return. On October 28, Chinese port prices firmed by 15-30 yuan/t, following a 2.7% rise in coking coal futures on the DCE on reports that one of the Mongolian coal supply routes to the Mandula border crossing has been suspended for repairs, while inquiries for small cargoes with November-December loading have emerged in India amid declining port inventories.

PCI prices firmed on limited supply of Russian coal, which spurred demand for Australian material from key consumers, primarily India, where several spot deals have recently been concluded.

The retroactive price for Low Vol PCI for Q3 2026 was agreed between Australia’s Foxleigh and Northeast Asian steel mills at 175.25 USD/t FOB, versus 171.00 USD/t FOB for Q2 2026.

Source: CCA