Over the past week, thermal coal indices on the European market strengthened to the level of 114-115 USD/t. Quotations corrected upward after falling a week earlier amid a reduction in stocks, rising gas and electricity prices.
Gas quotes at the TTF hub surged to 404 USD/1,000 m3 (+21 USD/1,000 m3 w-o-w), driven by an increase in gas withdrawals from the EU storage facilities.
Coal stocks at ARA terminals decreased to 6.2 mio t (-0.2 mio t w-o-w).
Despite logistical constraints, South African High-CV 6,000 was holding below 100 USD/t at 98 USD/t, following a continued build-up of stockpiles in India as well as weak demand in Europe.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao eased by 2 USD/t to 132 USD/t, resulting from the cold weather retreat and stabilization of coal transportation. Market participants also note deterioration of demand on the spot market, caused by sufficient level of imports and supplies under long-term contracts with local mining companies.
Chinese authorities plan to bring back import duties on coal, canceled in 2022. Thus, duties on thermal coal may again amount to 6%. Cancellation of zero tariffs is likely to affect Russia, Mongolia, South Africa, Colombia, Canada and the USA. Meanwhile, ASEAN countries, including Indonesia and Australia, will continue to benefit from the zero-duty regime through free trade agreements.
Indonesian 5,900 GAR gained 1 USD/t to 93 USD/t. Asia-Pacific countries are seeing a decline in activity ahead of the New Year celebrations. In addition, Indonesian miners continue to face uncertainty and limited supply for January as only a few of them managed to settle production volumes for 2024 with the government.
Australian High-CV 6,000 keeps holding slightly below the 150 USD/t level as the Asia Pacific market shows a slight increase in demand for High-CV material.
Idemitsu received approval from the Australian authorities to extend the life span of 7.0 mio t/year Boggabri mine in New South Wales for thermal coal exports. Thus, the license was prolonged until the end of 2036 and will enable the Japanese company to produce additional 28.1 mio t.
Australian HCC metallurgical coal prices climbed above 320 USD/t. Some market participants assume that quotations have reached the peak, and the increase in supply is likely to lead to a downward trend. However, support is provided by limited throughput at Hay Point terminal, where the vessels queue and waiting time for loading increased to 15-20 days.
In addition, after 12 deaths in a mine accident in the northeastern part of China, some companies, producing 5 mio t of coal per year in Heilongjiang province, were shut down. Presumably, in the same region, additional mines with annual throughput of 11 mio t will be suspended as a result of inspections.
From January 01, 2024, China is expected to reimpose import duties of 3% on metallurgical coal from Russia, Mongolia, USA and Canada.
Source: CAA
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