Over the past week, European thermal coal indices sank below 100 USD/t mark on such factors as weak demand and increased gas consumption, despite the growth of coal generation margins. Stockpiles at ARA terminals rose up, nevertheless they remain at comfortable levels, given the reduction in coal-fired generation capacity.
Gas quotations at TTF hub jumped to 600.91 USD/1,000 m3 (+27.36/1,000 m3 w-o-w) on the back of active consumption and reduction of gas reserves in EU underground storage facilities to 47%. The European Commission is considering capping natural gas prices, which reached a two-year high, as withdrawals in February turned out to be a record for the month over the past four years. Coal stocks at ARA terminals eased to 4.03 mio t (-0.27 mio t or -6% w-o-w).
South African High-CV 6,000 slipped to 95 USD/t, failing to break upwards to 100 USD/t level as the demand from India and the Asia-Pacific stays limited. However, Mid-CV prices slightly rebounded.
As a result of pressure from the South African president, Transnet permitted private operators to operate the entire rail network, including the North Corridor. Thus, Transnet will receive investments that should enable the company to improve the safety and efficiency of rail transportation.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao were stable at 105-106 USD/t. The quotes growth is hindered by the price downgrade by Shenhua as well as by the increase in stockpiles. However, some market participants expect prices to drop further due to the forecasted higher production in the coming days and recovery of industrial activity only by the end of February.
Inventories at the 9 largest ports totaled 27.68 mio t (+2.10 mio t w-o-w).
Indonesian 5,900 GAR fell to 86.50 USD/t, the price of 4,200 GAR slightly corrected below 48 USD/t, following limited demand on the spot market as well as high consumer’s stockpiles. The demand from China is shifting in favor of Low-CV, because of falling electricity costs and tougher competition, resulting from growing RES generation.
Australian High-CV 6,000 settled below 103 USD/t as buyers take a wait-and-see attitude amid a general downtrend.
Australian HCC metallurgical coal index strengthened to 190 USD/t on expected demand from Europe, driven by a fire at Szczyglowice (JSW) mines in Poland and Leer South in the US. Meanwhile, uncertainty is increasing in the market with the introduction of 25% import duties on all steel in the US.
Negotiations between Australia’s Foxleigh, as well as Japanese Nippon Steel and Korean Posco, resulted in a benchmark for Low Vol PCI for Q4 2024 being set at 156.75 USD/t FOB (-0.75 USD/t vs. Q4 2023). Negotiations over the benchmark for Q1 2025 are expected to commence shortly.
Source: CCA Analysis
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