Last week, the European thermal coal indices recovered to around 150 USD/t amid a better sentiment on the coal market.
Recently, speculations over Gazprom’s plans to launch Nord Stream-2 gas project in October 2021 slowed down gas prices rally, impacting negatively demand for coal.
However, on August 25, 2021, Germany refused to withdraw the operator of Nord Stream-2 from the rules of the EU gas directive, under which Gazprom shall not be a sole owner of the pipeline and will be able to supply not more than 50 percent of the expected gas volume.
As a result, TTF gas quotes inched higher to 45.4 EUR/MWh (+0.5 EUR/MWh to August 18, 2021). The EU carbon quotes decreased to 56.5 EUR/t (-0.6 EUR/t to August 18, 2021). ARA coal stocks amounted to 4.40 mio t (+0.04 mio t to August, 18 2021).
The limited supply of material on the international market continues to support coal prices. Among the key coal exporting countries, only Russian mining companies managed to restore production volumes to the level of 2019. The export of thermal coal from Russia in January-July 2021 amounted to 132.40 mio t (+3.19 mio t to January-July 2019).
The heightened demand from Pakistan for South African coal to a certain extent offset the decline in the trade activity of Indian consumers and strengthened coal prices over 140 USD/t. According to experts, South African coal prices may grow until the end of 2021 amid the problems with the railway line, connecting the coal-producing provinces of South Africa and the port of Richards Bay.
South African state-owned company Eskom announced its intention to close 8-12 GW of its coal-fired power plants over the next 10 years, which is about 30% of its current capacity. This decision is motivated by the strategy of the generating company to reduce CO2 emissions.
The prices of 5500 kcal/kg NAR coal of domestic production in the port of Qinhuangdao exceeded 162 USD/t after the 14-day quarantine was imposed in the country, limiting mining activities of the Chinese companies.
Lowering trading activity in the Asia-Pacific countries weakened the indices of the Australian material below 177 USD/t. Due to the deteriorating epidemiological situation in the key coal-producing regions of Australia, the ban on coal mining in the country was extended until August 28, 2021.
The Indonesian government allowed major mining companies to resume their export supplies, which slightly lowered the indices of coal from Indonesia below 127 USD/t.
The ongoing ban on coal mining in Australia from August 05, 2021 to August 28, 2021 owing to the COVID-19 outbreak had a positive impact on the Australian coking coal indices over 245 USD/t.
Source: CAA Analytics
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