Last week thermal coal indices in Europe continued their rally over 150 USD/t. High gas prices at 569 USD per thousand cubic meters amid a shortage of gas supplies to the EU increased demand for coal. Additional support for coal quotes was provided by a decrease in the volume of wind generation in the European countries to 364 GWh (-19 GWh to August 04, 2021).
South African coal quotes were at multi-year highs over 135 USD/t. Coal indices stay in the uptrend amid the limited export supplies via the railway line connecting the coal-producing provinces of South Africa and the port of Richards Bay. In July, coal shipments were restricted, owing to civil protests in South Africa and repair works on the railway line, carried out by the local operator Transnet. Experts estimate the loss of South African exports in H1 2021 at 9 mio t.
The prices for 5500 kcal/kg NAR coal of domestic production in the port of Qinhuangdao decreased below 162 USD/t amid lowering trading activity of Chinese buyers. Generating companies in China took a wait-and-see position, expecting the further decrease in coal quotes.
Australian coal prices exceeded 170 USD/t amid a one-week ban on operations at a number of mines in the country, resulting from the new COVID-19 outbreak. According to experts, the ban may be extended due to the further spread of the virus.
South Korea’s imports of thermal coal increased in July 2021 to a historical maximum of 11.6 mio t (+25% to July 2020) amid an increase in overall demand for electricity, which was driven by hot weather and lower nuclear output. Over 54% of South Korean coal imports came from Australia, which increased the supply of material in July up to 6.3 mio t of coal (+163% to July 2020).
Indonesian coal quotes rose over 125 USD/t amid government restrictions on coal exports. On August 04, 2021, the Indonesian government adopted a resolution on measures against coal companies that do not fulfill their obligations to supply coal to the domestic market. As a result, 34 Indonesian mining companies were banned.
The week-long ban on operations amid a COVID-19 outbreak at a number of mines in Australia spurred indices of coking coal of Australian origin over 220 USD/t.
Source: CAA Analytics
