Over the past week, thermal coal indices on the European market fell sharply to the level of 112-115 USD/t. Quotes were pressured by such factors as warming temperatures, increased supplies, and falling gas prices. The share of coal-fired generation in Germany decreased from 17% to 10%, while the share of wind generation rose from 20% to 31%.
Gas quotations at the TTF hub dropped to 398 USD/1,000 m3 (-39 USD/1,000 m3 w-o-w) on higher supplies from Norway.
Coal stocks at ARA terminals remained virtually unchanged at 6.4 mio t (-0.02 mio t w-o-w).
Despite logistical constraints, South African High-CV 6,000 declined below 100 USD/t level, hitting a 4-month low amid reduced demand in Europe and India.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao climbed 2 USD/t to 133 USD/t as falling temperatures and snowfall slowed rail transportation of coal as well as transshipment at ports. Heavy precipitation also negatively affected coal production at mines in Inner Mongolia province. Snowfalls are forecasted to hamper operations in Shanxi and Shaanxi provinces in the coming days. In addition, some traders are in no hurry to conclude deals at current prices, expecting further growth.
Discussions on long-term contracts for 2024 continued as agreements were not reached during the coal conference held on December 05-08, with the National Development and Reform Commission (NDRC) urging participants to resolve the issue by December 15. If the contracts are not signed, some volume may enter the spot market.
Coal stocks at Qinhuangdao port rose to 6.3 mio t, while combined inventories at 9 major ports went up to 28.9 mio t (+1.1 mio t and +2.0 mio t respectively w-o-w). At the same time, stockpiles at the 6 largest coastal TPPs reduced to 13.5 mio t (-0.8 mio t w-o-w).
Indonesian 5,900 GAR eroded by 1 USD/t to 91 USD/t, reflecting weaker demand from India, where there is an upturn in domestic supply and growing consumers’ inventories. Moreover, market participants are not actively entering into new deals ahead of the launch of the new contract registration platform (January 01, 2024), fearing that the process may not go smoothly.
Despite the unfavorable weather conditions, most Indonesian companies are likely to meet production targets for 2023.
Australian High-CV 6,000 broke through 160 USD/t threshold as Cyclone Jasper approached Australia’s shores and fears of supply disruptions after a railroad infrastructure accident sent traders aggressively covering short positions.
On December 06, a coal train derailed on the Ulan line (capacity of 70 mio t/year) in the state of New South Wales, leading to the port of Newcastle. It is expected that the consequences will be fixed and the traffic will resume on December 17.
Australian HCC metallurgical coal indices corrected below 325 USD/t on the back of easing concerns about supply constraints. The negative factor for quotations is that, according to updated forecasts, Cyclone Jasper in Queensland state will not affect the areas where metallurgical material is mined, and some washing plants and coke producers in China are seeking to increase the share of consumption of cheaper material, in particular, from Mongolia, in order to cut costs.