World coal market overview – week 13

Last week thermal coal indices in Europe dropped to 69-70 USD/t due to warm weather, weighing on electricity demand in EU. Moreover, growing carbon prices put additional pressure on coal quotes. On March 31, 2021, the price of carbon quotas, traded on Emissions Trading System, reached 42.5 EUR/t (+0.7 EUR/t to March 24, 2021).

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Nevertheless, increasing TTF natural gas indices to 19.1 EUR/MWh (+0.5 EUR/MWh to March 24, 2021) due to shortage in European underground gas storage facilities, hold back a further decline in coal prices.

Wait-and-see attitude of Indian enterprises due to expensive high calorific coal of South African origin lowered coal prices to 96-97 USD/t. Nevertheless, several spot deals with cement producers from Pakistan supported the prices of medium calorific material.

Richards Bay coal stocks increased to 3.1 mio t (+0.2 mio t to Mar 24, 2021).

Reopening of the port of Newcastle in Australia after technical problems, caused by heavy rains last week, weakened the Australian coal indices to 98-99 USD/t. In addition, the decline in demand from Japanese energy companies amid emissions restrictions, imposed by the Japanese government until the end of May 2021, also negatively affected the quotes. In April 2021, the Japanese government plans to limit the export of technologies and equipment for coal-fired power plants.

Stronger demand from Chinese generating companies for Indonesian material strengthened Indonesian coal quotes to 74-75 USD/t. Low volumes of hydrogeneration and limited output of coal mines due to safety checks in China encourage Chinese market participants to restock with imported material.

Seasonal demand from Chinese steel companies for imported coking coal from the Asia-Pacific region had a positive impact on metallurgical coal prices, supporting the indices of coking material from Australia to 112-113 USD/t.

Source: CAA Analytics

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