Russian coal exports face risk as RZD pushes ship-or-pay principle
December 16, 2025
Global coal prices moved lower over the past week as weakening demand, ample supply and diverging regional fundamentals weighed on market sentiment.
Negative sentiment prevailed in the coal market: European indices declined; prices in China continued to adjust downward; in Australia, thermal coal moved in different directions, while metallurgical material strengthened.
Over the past week, European thermal coal indices fell to 96 USD/t, continuing the downward trend amid lower gas prices, above-average temperatures and comfortable coal stocks at ARA terminals. Pressure on energy commodities also stemmed from progressing negotiations on a peace agreement between Russia and Ukraine.
Gas quotations on the TTF hub dropped to 328.00 USD/1,000 m3 (-9.41 USD/1,000 m3 w-o-w). Since the start of the year, gas prices have fallen by 40%. European UGS facilities remain in withdrawal mode, with stocks declining by 2 percentage points to 72% w-o-w. Coal stocks at ARA terminals remained largely unchanged at 3.65 mio t (-0.05 mio t w-o-w).
South African High-CV 6,000, after six weeks of recovery, corrected sharply below 88 USD/t, driven by weakening demand and falling prices in Europe.
According to an assessment by South African mining company Exxaro, the global thermal coal market in 2025 is in a difficult adjustment phase. Key negative factors include low demand, oversupply, and a shift by Asian countries (China, India) towards using their own coal resources. Meanwhile, Exxaro has halted thermal coal exports via the Mozambican port of Maputo because trucking became unprofitable on the back of low global prices. Instead, the company will ramp up shipments through the South African RBCT terminal, facilitated by improved operations of rail operator Transnet.
Exxaro’s total annual exports are expected to be in line with last year’s level (around 7 mio t), as is coal production volume (~37 mio t). However, Thungela Resources Ltd. stated its export sales of South African thermal coal in 2025 will grow by 8% to 13.6 mio t, while production volume will rise by 1% over the same period to 13.7 mio t.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao went down to 110 USD/t as the downward trend persists. Price pressure came from factors such as rising stockpiles, excess supply, and reduced activity, resulting from lower industrial sector consumption and a wait-and-see stance among traders. Furthermore, a mild cold spell contributed only a slight increase in consumption at thermal power plants.
The market is showing the first signs that the loosening of safety controls in mines since the beginning of November may have led to overproduction. In Inner Mongolia province, production over the last month climbed by 0.4 mio t per day (from 2.4 mio t/day to 2.8 mio t/day). However, there are doubts that the market will be able to absorb such a volume without consequences.
Stocks at 9 major ports saw a notable increase to 28.90 mio t (+1.65 mio t w-o-w). Inventories at 6 major coastal thermal power plants totaled 14.51 mio t (+0.07 mio t w-o-w), while consumption edged up to 797k t/day (+4k t/day w-o-w).
Indonesian 5,900 GAR declined to 82.50 USD/t, the price of 4,200 GAR dropped to 46.95 USD/t. Chinese spot demand for Indonesian material contracted, and prices in tenders continued to fall. The market is primarily supported by traders’ activity, as producers avoid sales at current unfavorable prices.
The Indonesian government plans to introduce a 1-5% coal export duty starting January 2026, as well as tighten rules on retaining export revenue in the country. These measures, aimed at boosting state revenues, have drawn criticism from the industry. Coal companies warn the duty could erode margins and the competitiveness of Indonesian material, especially against a backdrop of weak prices.
Australian High-CV 6,000 rose to 109-110 USD/t, caused by tight supply. Nevertheless, Mid-CV quotes fell significantly, reflecting lower prices on the Chinese domestic market.
Australia’s HCC metallurgical coal index firmed to 210 USD/t. Last week, the quotations surpassed the 200 USD/t mark for the first time since late December 2024 and consolidated above this level. The steady gain is driven by constrained supply and growing demand, including from India, which is replenishing stocks, as well as from Southeast Asian countries. Inquiries were also received from Turkey.
Furthermore, there is insufficient supply of Premium Low-Vol coal in China, even though some Chinese traders believe current prices are inflated, and several companies in Hebei and Tianjin provinces have announced price reductions for coke.
Source: CCA Analysis
