Over the past week, European thermal coal indices ranged between 108-112 USD/t, following high volatility in the gas and electricity markets. Pressure on quotes was exerted by such factors as weak demand and increase in renewable generation.
By the end of 2024, coal imports by European countries slashed 30% to 36.7 mio t on the back of reduced consumption and growing focus on renewable energy generation.
However, in Q1 2025, steam coal usage is forecasted to be stronger year-on-year, supported by improved profitability of coal-fired generation.
Furthermore, Uniper will restart the 1.1GW Datteln power plant in Germany on February 05, after a 3-month downtime due to an accident (resulting in a 0.50 mio t coal consumption drop).
Gas quotations at TTF hub rose to 552.39 USD/1,000 m3 (+28.51 USD/1,000 m3 w-o-w), driven by active consumption as well as a reduction in gas reserves in EU underground storage facilities to 55%, combined with geopolitical tensions. Coal stocks at ARA terminals stood virtually flat at 4.30 mio t (-0.07 mio t w-o-w).
South African High-CV 6,000 consolidated below 100 USD/t level at 97 USD/t. Medium-CV material also weakened as demand in India remains constrained because of high inventories and lower sponge iron prices.
Rail operator Transnet managed to ramp up coal shipments on the North Corridor railway line to the RBCT terminal to 51.91 mio t in 2024 (+8% y-o-y).
Meanwhile, Transnet plans to expand the target to 55 mio t, while the African National Congress party last week suggested that South Africa should consider providing funds for the rail operator, which is a strategically important company, but has been struggling to meet its debt obligations.
Thus, South Africa could provide Transnet with financial assistance similar to energy company Eskom, which was granted 13.6 billion USD in 2023.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao jumped to 106 USD/t on severe cold snap, with trading activity slowing down due to Chinese New Year celebrations (Jan. 29-Feb. 16).
Low temperatures are expected to cause some power plants restocking after the holidays. In addition, heavy snowfall constrained transportation in many producing regions and led to coal mining operations being suspended earlier than planned.
The China Energy Committee forecasts that electricity consumption is expected to grow to 10,400 TWh in 2025 (+550 TWh or +6% y-o-y).
Coal inventories at the 6 largest coastal thermal power plants rose to 14.52 mio t (+0.30 mio t). Stocks at the 9 largest ports totaled 25.96 mio t (+0.64 mio t w-o-w).
Indonesian 5,900 GAR decreased to 88 USD/t, while 4,200 GAR also slightly corrected below 49 USD/t, caused by limited demand on the spot market amid Chinese New Year and sufficient stockpiles.
Australian High-CV 6,000 slipped below 115 USD/t, resuming its downward movement after rebounding a week earlier.
Australian HCC metallurgical coal index kept sinking to 185-186 USD/t, resulting from increased supply on the spot market and limited demand. In 2024, steel consumption in China totaled 892 mio t (-5.4% y-o-y).
In 2025, the decline is expected to continue although it is expected to slow to 1%, reflecting higher demand from manufacturers of cars, vessels and household appliances, while the negative trend in the construction sector will persist.
Source: CCA Analysis
