Global coal prices showed divergent movements across major markets this week as European indices corrected, Chinese prices eased, and Australian thermal coal strengthened.
Coal prices showed divergent movements: indices in Europe corrected downwards; in China, coal became cheaper; in Australia, thermal material quotations advanced, while metallurgical prices remained virtually unchanged.
Over the past week, European thermal coal indices corrected downwards to 121 USD/t, after reaching a high not seen since late 2023 (134 USD/t). Prices came under pressure from a sharp pullback in gas and oil from recent highs following Trump’s remarks about an imminent end to the conflict and de-escalation of attacks by Iran, as well as a decision by some G7 countries to release part of their oil reserves.
Additionally, Colombia increased weekly thermal coal shipments to Europe by 146%, from 0.17 mio t to 0.4 mio t. However, temperatures in Germany continued to drop this week and are expected to fall 1.2°C below seasonal norms on March 13, which will likely provide support to quotations, although current political events and statements are creating heightened volatility that may override many fundamental factors.
Gas quotations on the TTF hub stood at 598.3 USD/1,000 m3 (-2.34 USD/1,000 m3 or -0.4% w-o-w). On March 12, intraday prices reached 637 USD/1,000 m3 amid new attacks on transport vessels in the Strait of Hormuz. European UGS inventories fell by 1 percentage point to 29%.
South African High-CV 6,000 was holding at 109-110 USD/t (a 1.5-year high) due to rising gas prices, as well as uncertainty surrounding Indonesian supplies and increased demand from India.
Indian buyers emerged from their wait-and-see stance over the past week and returned to the imported coal market, snapping up South African cargoes following the suspension of LNG production by India’s largest supplier, Qatar.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao declined by 1 USD/t to 108 USD/t after an extended rally. The modest decrease reflects signs of a move toward oversupply, driven by rapidly growing production volumes and reduced demand from power plants because of increased renewable generation. Purchases by non-industrial consumers also diminished significantly on expectations that prices have further room to fall.
Many producers lowered their selling prices after an increase in trucking costs of 10-15 yuan per tonne (1.45-2.18 USD/t) this week also weakened buyer interest.
Stocks at 9 major ports increased to 25.91 mio t (+0.66 mio t w-o-w), while inventories at 6 major coastal thermal power plants decreased to 12.92 mio t (-0.65 mio t w-o-w).
Indonesian 5,900 GAR jumped to 91 USD/t, while 4,200 GAR rose to 58 USD/t. Indonesian material continues to become more expensive due to reduced coal production and export volumes. Approval of mining plans remains uncertain. Demand in China has slowed, partly because of higher freight costs, leading Chinese buyers to resell their cargoes. Meanwhile, demand proved strong in South Korea, Bangladesh, Thailand, the Philippines, and Malaysia.
Australian High-CV 6,000 climbed above 135 USD/t. The escalation of military action against Iran and the blocking of the Strait of Hormuz led to a sharp strengthening on expectations that some North Asian countries may need to compensate for LNG supply shortfalls with high-CV material.
Furthermore, some market participants, including coal buyers and company executives, expressed concerns that Australia’s mining industry could face a diesel supply crisis amid disruptions to global oil trade caused by the Middle East conflict, exacerbated by panic buying by Australian motorists. By some estimates, Australia’s diesel stocks could run out as early as March, potentially leading to coal production stoppages. However, authorities deny that the situation is critical.
Australia’s HCC metallurgical coal index dipped slightly below 219 USD/t. The decline in metallurgical coal quotations has paused. Negative factors continue to exert pressure, including weak demand in India and China.
Chinese consumers have reduced the frequency of tenders for imported coal, particularly for future deliveries, as market prospects remain unfavorable. Consequently, they are primarily focused on fulfilling long-term domestic contracts or making purchases from port inventories as needed.
Source: CCA
