Global coal prices rise as Europe and Asia-Pacific markets strengthen

Global coal prices continued to rise over the past week as supply risks, expensive LNG and stronger Asia-Pacific demand supported both thermal and metallurgical coal markets.

The upward trend continued in the global coal market over the past week: thermal coal strengthened in the Atlantic and Asia-Pacific markets, while metallurgical coal quotations kept rising amid strong demand from China.

In the European coal market, prices jumped above 140 USD /t. Quotations thus reached their highest level since late October 2023 amid the escalation of military action between the US and Iran, Ukraine’s attacks on Russian gas facilities in Yamal, expensive LNG, and the inability to fill European underground gas storage facilities before winter.

Coal stocks at ARA terminals stayed at 4.1 mio t. A shipment of 100,000 t of coal from the US is expected shortly, with Colombian material deliveries planned for October. Water levels on the Rhine remain low, limiting barge transport of coal to power plants. Coal generation in Germany has declined due to growth in wind generation, as well as output restrictions aimed at conserving coal stocks.

Gas TTF spiked to 990 USD/1,000 m3 (+111 USD/1,000 m3). Gas stocks in EU underground storage facilities stood at 67.3% (+1.7 pp), which is 12.3 pp below last year’s figure (79.6%).

South African High-CV coal index 6000 exceeded 128 USD/t. Prices for South African thermal coal reached their highest levels since April 2023 due to the war between the US and Iran, as well as rising prices for Australian and Indonesian material. Indian buyers are resisting price increases for medium-calorie South African material. Low-CV South African coal 4800 NAR is being actively shipped to Bangladesh, Pakistan, and Indian cement plants.

Stocks at the Richards Bay terminal fell to 2.10 mio t, while the backlog of unfulfilled loading rose to 1.00 mio t, supporting prices.

The domestic Indian market is facing a supply deficit. Disruptions in rail transportation due to monsoon rains in recent weeks are limiting domestic supplies. Coal India is directing all coal to the power sector, with even contracted volumes for non-industrial consumers being redirected to thermal power plants with low stocks.

Market participants hope the government may issue an order under Article 11 of the Electricity Act, which allows the rise in imported coal costs to be passed on to consumers through tariffs.

In China, spot FOB prices for 5500 NAR coal at the Qinhuangdao port rose above 145 USD /t (+USD 12/t), driven by limited supply.

Meanwhile, the domestic Chinese market showed mixed price movements at mines and in northern ports (rising in ports and falling at mines). Demand remains weak. Discounts of 5–6 yuan/t have appeared, and a number of participants believe the FOB market is close to its peak.

Prices at mines were adjusted downward after a prolonged rise: the largest decline was observed in Shaanxi province for high-calorie grades. In Inner Mongolia, the decline was 10–30 RMB/t, in Shanxi prices remained flat.

The reasons for the reversal were the completion of purchases by end consumers (chemical industry, metallurgy), power plants waiting for further price declines due to negative margins. In addition, most regions are experiencing a cold snap of 4–12°C, which has reduced the need for air conditioning. Finally, the correction was a response to the sharp price rise in coal-mining provinces a week earlier (+120 RMB/t in Inner Mongolia, +180 in Shaanxi, +70 in Shanxi).

Market participants are discussing the lifting of some restrictions and a possible increase in production in Shanxi.

The central government (NDRC) is studying the possibility of increasing coal supplies from Xinjiang, an autonomous region in the northwest of the country. Coal reserves in the region are estimated at 2.19 trillion t, accounting for about 40% of China’s total reserves. Production is concentrated at the Zhundong and Hami coal bases, where many mines still have unused capacity.

The main problem for increasing supplies from the region is limited railway capacity. In August 2026, a new logistics route linking Xinjiang with Shanxi (China’s largest coal-mining province) was launched. Increased supplies of Xinjiang coal to eastern and southern China could intensify competition with imported thermal coal.

Medium-term support factors may include the planned repair of the Daqin–Qinhuangdao railway line starting in early October (lasting about 25 days), as well as stockpiling ahead of the week-long National Day holiday on October 1–7. Pressure on prices may come from forecasts of a warm winter due to El Niño, which could weaken winter demand for stockpiling.

Coal stocks at the 9 largest ports fell over the week to 23.73 mio t (-0.21 mio t), while stocks at the 6 largest coastal thermal power plants stood at 14.11 mio t (-0.08 mio t).

Prices for Indonesian material have reached their highest levels since May 2023. A prolonged drought in Indonesia due to El Niño has led to shallowing of rivers (especially in Central Kalimantan), disrupting barge transport from open-pit mines to export terminals. Business activity has declined — buyers are refraining from concluding deals.

Market participants are discussing rumors of possible additional production quotas being allocated to two major producers. However, half of the additional volume would have to go to the state-owned company PLN, meaning the increase in export supply will be limited.

Indonesian coal 5900 GAR rose to 112 USD/t, while low-calorie material 4200 GAR climbed up to almost 73 USD/t.

Australian High-CV 6,000 coal strengthened to 148 USD /t, approaching 150 USD/t. Prices are supported by uncertainty over Indonesia’s thermal coal export policy, rising LNG prices in Asia, and higher import prices at Chinese ports.

Australia’s HCC metallurgical coal index rose to just under 285 USD/t. Demand from China remains high due to limited domestic supply amid ongoing safety inspections and a slowdown in Mongolian coal supplies.

Prices for Russian PCI coal continued to rise amid limited supply and persistently high demand from China. Limited supply of Russian material and high Chinese demand supported Australian PCI coal, which rose over the week to 219 USD/t.

Source: CCA