Global coal prices fall sharply as Europe and Asia weaken

Global coal prices declined sharply over the past week as energy markets corrected and weaker thermal coal quotations emerged across Europe, South Africa, China and Australia.

Over the past week, the coal market saw a significant decline in prices. European indices plunged; South African and Indonesian material corrected lower; in China, coal became cheaper; in Australia high-CV index dropped, while metallurgical quotations moved in different directions.

European thermal coal indices plummeted below 135 USD/t amid a broad sell-off across energy markets. The decline in oil (-17.3%) and gas (-14%) prices stemmed from expectations of de-escalation in the Middle East conflict, as US-Iran consultations resumed with mediation by Qatar and Pakistan, and the Democratic Party’s victory in the US midterm congressional elections strengthened expectations of reduced military involvement and a possible end to the Strait of Hormuz blockade.

Additionally, Iran’s supreme leader approved negotiations to end the conflict. At the same time, uncertainty persists: an Iranian island of Qeshm was struck on November 02.

Gas quotations on the TTF hub declined to 1,042.19 USD/1,000 m3 (-96.08 USD/1,000 m3 w-o-w). Total EU underground gas storage stood at 74.3% (-0.6 ppts w-o-w), 8.6 ppts below last year’s level of 82.9%.

South African High-CV 6,000 fell below 128 USD/t, following European quotations, though the decline proved less pronounced due to force majeure on the rail network and steady demand from India.

On November 02, an Eskom power outage at the Ermelo CTC station, caused by severe weather in the Highveld area, halted train movements on several sections of the coal line, disrupting shipments on the Ogies-Ermelo-Fryheid route; on November 03, rail operator Transnet declared force majeure on thermal coal deliveries to Exxaro. Restoration timelines were not specified. Most market participants assess the incident’s impact as limited, since such disruptions during the rainy season tend to be short-lived.

South Africa’s Department of Mineral and Petroleum Resources reported that none of the four applications submitted in the first round of a tender for 2 GW of gas-fired generation capacity met the requirements — primarily due to insufficient gas supply guarantees.

The failed tender could prolong the country’s reliance on coal and casts doubt on the retirement of 8 GW of coal capacity (including the Camden, Hendrina, Grootvlei, and Arnot power stations) by fiscal 2030, as envisaged in the Integrated Resource Plan (IRP 2025).

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao fell to 150 USD/t, as Shanxi province is expected to continue ramping up production in November. However, output volumes may remain well below the level preceding the major accident in May.

In recent days, the market has found some support from forecasts of a 6-10°C cold snap across most regions of the country. Many market participants expect a moderate rise in FOB prices in mid-November amid heating demand in northern China and limited supply, though the longer-term outlook remains uncertain.

According to the China Meteorological Administration, the winter will be unstable: sharp temperature swings are expected across most regions in the first half of the season, while the second half may prove significantly warmer than normal.

Coal stocks at 9 major ports rose to 25.66 mio t (+1.05 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 14.59 mio t (flat w-o-w).

Indonesian 5,900 GAR slipped below 124 USD/t, while the price of 4,200 GAR corrected slightly below 78 USD/t. Indonesian coal exports are stabilizing owing to rainy weather, which has improved barge transport conditions on key rivers.

The state is tightening control over coal exports: under a new document, DSI is now authorized to manage exports of strategic commodities and, from January 01, 2027, is to become the sole intermediary for exports.

Indonesia’s Minister of Energy and Mineral Resources said on November 2 that the country plans to supply raw materials, including coal and LNG, bypassing transit countries which, he said, derive additional income from this. The minister also noted that in 2025 coal prices were at minimal levels, limiting miners’ profits and budget revenues.

The government introduced rules aimed at raising the price index (HBA), but they are not being observed, so authorities intend to use quotas to regulate production and balance supply and demand. Coal production in the country in 2026 is expected at 720 mio t — above the initial quota (600 mio t) but below 2025 (790 mio t).

At the same time, the reduction in seaborne supply could prove more significant: thermal coal exports may fall to around 445 mio t (more than 50 mio t y-o-y) due to permit-related constraints, domestic supply obligations, and logistics.

Australian High-CV 6,000 dropped below 149 USD/t, while 5,500 material strengthened above 114 USD/t, recouping part of the late-October decline.

Peabody Energy raised its Australian thermal coal export guidance for 2026 to 7.53-7.71 mio t (previously 7.17-7.71 mio t) on higher output. In July-September, the company’s exports totaled 1.81 mio t versus 2.54 mio t a year earlier; over nine months, 5.26 mio t (7.08 mio t in January-September 2025). The average realized export price in Q3 rose to 110.64 USD/t (84.37 USD/t a year earlier), with the cost of production up to 62.37 USD/t (54.27 USD/t a year earlier).

Prices for premium metallurgical coal HCC and PCI moved in different directions. Australia’s HCC metallurgical coal index continued to fall, standing at 262 USD/t, while Low Vol PCI, by contrast, jumped to 205-206 USD/t.

The market is again discussing the possibility of ramping up supplies through the China-Mongolia border, though so far this is mainly affecting sentiment: coking coal futures on the DCE fell another 2.5%. By some estimates, China still faces a shortage of Mongolian coal, and it is premature to draw conclusions before actual truck shipment volumes rise; at the same time, some market participants view the decline in offers as a sign of weakening price expectations. PCI quotations were supported by steady demand from India and limited supply of Russian material.

Source: CCA