Global coal prices corrected over the past week as European indices fluctuated and Australian thermal and metallurgical coal weakened.
Over the past week, the coal market saw a correction: European indices were volatile; in China prices stood flat; in Australia, both thermal and metallurgical coal became cheaper.
In the European thermal coal market, indices traded in a 117-122 USD/t range amid the shifting US-Iran conflict. Early in the week, quotations fell to 117 USD/t due to lower gas prices, as the geopolitical risk premium diminished on the back of the signs of renewed US-Iran dialogue. Furthermore, German electricity prices dropped by 10%, wind generation surged 74%, while coal generation declined 25%. Coal stocks at ARA terminals rose to 4.25 mio t (+0.17 mio t w-o-w).
Nevertheless, by the end of the week, coal prices had returned above 122 USD/t. Persistently hot and dry weather in Europe caused water levels on the Rhine to drop to their lowest levels in decades. The gauge fell to 27 cm, down from roughly 65 cm a week earlier, and is forecasted to drop further to about 24 cm by Friday, potentially becoming the river’s lowest level since the 1990s.
Barges are operating at approximately one-third of capacity, with freight rates tripling over the past week, constraining coal deliveries to northwestern Europe.
Following sharp gains last week, gas quotations on the TTF hub corrected lower to 693.83 USD/1,000 m3 (-37.06 USD/1,000 m3 w-o-w). EU underground gas storage stood at 56% (+2 ppts w-o-w), 11 ppts below last year’s level of 67%.
South African High-CV 6,000 weakened to 104-105 USD/t, pressured by limited demand and high inventories at the Richards Bay Coal Terminal (RBCT).
Liberty Coal announced the imminent restart of a refurbished separation plant at the Optimum Coal Mine will significantly improve product quality as the company plans to ramp up exports. Liberty is currently processing only through crushing and screening, exporting 5,700 and 4,800 material.
The commissioning of the upgraded plant is expected to enable the company to access higher-margin export markets. The first phase is scheduled for commissioning in late August, with management targeting nameplate capacity by October. Initially, the plant will process 0.25–0.30 mio t per month, with subsequent phases increasing capacity to 0.80 mio t per month.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao stood flat at 122 USD/t. Quotations stabilized in the Chinese thermal coal market. Supply was supported by news of mine suspensions this week because of the ongoing safety inspections, though this was offset by weak demand from end-users, who still see no need to build inventories despite rising temperatures.
Peak summer season supported higher daily coal consumption at power plants, but large-scale purchases made by coastal and Yangtze basin stations ahead of summer ensured high inventory levels among end-users. Coal stocks at 9 major ports fell to 28.74 mio t (-1.97 mio t w-o-w), while inventories at 6 major coastal thermal power plants remained at 14.47 mio t (flat w-o-w).
Indonesian 5,900 GAR edged below 104 USD/t, while 4,200 GAR stood at 62 USD/t (flat w-o-w). Indonesian quotations returned to the downside amid subdued sentiment in India and China. Buyers from Thailand and Vietnam showed interest in purchases, but the volumes sought were small and did not impact market quotations. Mining companies continue negotiations with the government over production quota approvals for H2 2026.
Some reports indicate the output increases will only be authorized on condition that 50% of additional volumes be directed to state utility Perusahaan Listrik Negara (PLN), raising concerns over reduced export availability.
Companies whose approved production volumes came in significantly below initial plans state that without quota increases, it will be challenging to simultaneously meet domestic market obligations and maintain export volumes.
Australian High-CV 6,000 fell below 132 USD/t. Interest in Australian coal for September and October declined, as Asian importers with ample inventories adopted a wait-and-see stance.
Australia’s HCC metallurgical coal index slipped to 219 USD/t, remaining in a downward trend, caused by unfavorable fundamentals (seasonality and high supply). Traders also note an increase in spot availability of premium coking coal from some Australian producers.
Some market participants do not expect a meaningful recovery in demand from India even after the monsoon season ends in September. Buyer interest in China remained weak, with indicative trader prices also declining amid bearish market expectations, as the second round of domestic coke price cuts since early July has concluded.
Meanwhile, some consumers have resumed purchasing, which could signal possible support at current levels.
Source: CCA
