Last week, thermal coal quotations on the European dropped below 104 USD/t, pressured by reduced consumption, increased RES generation, and lower gas prices amid easing concerns over the conflict in the Middle East. Furthermore, in the coming week some tonnages from the USA will resume via the port of Baltimore, which earlier had been blocked after a bridge collapse.
Gas quotations at TTF hub corrected down to 330 USD/1,000 m3 (-10 USD/1,000 m3 w-o-w) on increased Norwegian gas supplies. Coal stocks at ARA terminals decreased to 5.4 mio t (-0.2 mio t w-o-w), falling below 5.5 mio t for the first time in two years, as European shipments declined because of weak demand.
South African High-CV 6,000 strengthened above 106 USD/t due to low stockpiles and steady demand from India and the Asia Pacific. Richards Bay Coal Terminal’s (RBCT) inventories rebounded from their lows to 2.1 mio t (+0.2 mio t w-o-w).
In June, the South African government plans to extend the lifespan of Eskom’s coal-fired power plants, a positive news for local mining companies, as South African combined TPPs consume a total of 100 mio t of coal, or about 50% of the country’s overall production. The closure of the three thermal power plants (Camden, Grootvlei and Hendrina) is expected to be delayed from 2023-2027 to 2027-2030.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao added 1 USD/t to 120 USD/t on expectations of higher demand, related to the restocking ahead of summer. However, quotations adjusted downward during the last few days, after the Shanxi province’s authorities announced easing of control over production volumes, as well as a request to coal companies to ramp up output to 110% of available capacity and resume night shifts. In the past week, authorities also permitted the restart of mining at previously halted mines, where accidents had occurred, but remedial works were carried out and violations were fixed.
Inventories at the 6 largest coastal thermal power plants increased from 14 mio t to 14.3 mio t, while consumption rose from 740 kt/day to 746 kt/day. Stocks at the 9 largest ports totaled 24.4 mio t (+1.2 mio t w-o-w).
Indonesian 5,900 GAR climbed to 91.8 USD/t (+1.3 USD/t w-o-w), while Low-CV 4,200 GAR firmed to 57 USD/t (+1 USD/t w-o-w). Indonesian coal quotations moved upward, driven by stable demand from Chinese chemical, cement and power producers. In addition, demand rose from India (for Low- and Medium-CV coal) and Japan (for 5,700-6,000 GAR material). The positive dynamics is also explained by the recent sharp warming in some Asian countries, including India, where the government required TPPs, running on imported coal, to load generation capacity at 100% until October 15.
Australian High-CV 6,000 dipped below 145 USD/t, while Medium-CV 5,500 edged up to 90 USD/t. Australian coal indices moved mixed on the back of growing demand for Low- and Medium-CV coal from the Asia-Pacific, combined with pressure on High-CV quotes, amid falling prices in the European energy market.
Australian HCC metallurgical coal quotations slumped to the level of 235 USD/t. Given the deteriorating conditions in the steel market, Chinese coke producers refused to raise prices for their products, putting pressure on Australian indices.
As part of a large-scale business restructuring, Anglo American revealed plans to sell its metallurgical coal division in order to focus on copper and iron ore production. Anglo American also stated that it is currently considering an offer from one of the potential buyers, while the company recently rejected an offer from BHP. Anglo American produced 16 mio t of metallurgical coal in 2023.
Source: CAA
