Over the past week, European thermal coal indices surged above 106 USD/t, having adjusted to 100 USD/t by the end of the week. The prices were supported by reduced coal supply from Colombia, the US and Kazakhstan.
Export shipments of steam coal from Colombia fell by 25% w-o-w. Furthermore, Germany saw electricity prices rise on the back of a 16% increase in coal-fired generation and a 38% and 42% drop in solar and wind generation respectively.
Gas quotations at the TTF hub strengthened to 459.91/1,000 m3 (+6.12 USD/1,000 m3 w-o-w). European gas storage reserves are hovering at 34%, while many market participants consider the resumption of gas supplies from Russia unlikely. Coal stocks at ARA terminals stayed at 3.62 mio t (flat w-o-w).
South African High-CV 6,000 climbed above 89 USD/t, following the strengthening of the European market. However, the decline in Medium-CV prices continued, reflecting limited demand in India, where stockpiles are at high levels. Meanwhile, the demand from Indian sponge iron producers improved, owing to higher steel prices.
Railway operator Transnet reached an agreement with the South African Transport and Allied Workers Union (Satawu) on wage increases, but the possibility of a strike remains as the dispute with the main union (United National Transport Union) is still ongoing.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao stabilized at 94 USD/t, while the negative trend persisted due to weak buyer activity, high port inventories and rising temperatures. Moreover, end users managed to build up sufficient volumes ahead of the long weekend to celebrate the Qingming holiday (April 04).
Inventories at the 9 major ports declined again to 30.76 mio t (-0.42 mio t w-o-w), while coal stocks at the 6 largest coastal TPPs totaled 13.50 mio t (-0.04 mio t). The consumption lowered to 750 kt/day from 777-780 kt/day a week earlier.
Indonesian 5,900 GAR slipped to 83.50 USD/t, the price of 4,200 GAR eased to 48.95 USD/t amid limited trading activity, caused by the celebration of the end of fasting (Uraza al-Fitr or Eid al-Fitr) until April 08. Limited demand in India and China is also putting pressure. In addition, Colombia is intensifying competition by offering discounts.
In response to market participants’ dissatisfaction with the use of domestic Indonesian indices in export contracts, the government relaxed requirements and temporarily permitted fixed-price deals or use of independent agency quotes.
Australian High-CV 6,000 was stable at 98 USD/t. However, Medium-CV material continues to show weakness related to reduced imports from the Asia-Pacific, despite some advantage gained from uncertainty in Indonesian coal supplies, resulting from the authorities’ initiative to use domestic indices.
The Australian HCC metallurgical coal index slightly decreased to 169 USD/t on the back of consumers’ wait-and-see attitude within last week, ahead of the announcement of new duties in the USA.
Some support for quotations may be provided by the suspension of production on March 31 at Moranbah North mine (Anglo American) in Queensland state, where exceeded concentration of carbon monoxide was recorded, serving as a reason for workers’ evacuation. The company did not declare force majeure and production could resume shortly.
Whitehaven Coal confirmed the sale of a 30% stake in the Blackwater mine, which is located in Queensland and where metallurgical coal is produced, in favor of Japanese companies Nippon Steel (20%) and JFE Steel Corporation (10%).
Source: CCA Analysis
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