World coal market: brief overview

Over the past week, European thermal coal indices continued to decline below 98 USD/t amid falling gas prices, rising renewable generation, and increasing coal stocks at terminals. Additional pressure came from a sharp 30% drop in electricity prices in Germany, from 86.47 EUR/MWh to 61.00 EUR/MWh, which pushed the margins of coal and gas-fired generation into negative zone.

Gas quotations on the TTF hub fell to 394.59 USD/1,000 m³ (-3.23 USD/1,000 m³ w-o-w). European gas storage injections continued steadily, with underground gas storage (UGS) facilities reaching 73% of total capacity (+3 p.p. w-o-w) on the back of stable inflows. Coal stocks at ARA terminals rose to 3.39 mio t (+0.09 mio t or +3% w-o-w).

South African High-CV 6,000 dropped again below 90 USD/t, pressured by the downward trend in Europe. Demand in India remains subdued due to sufficient stockpiles.

South African company Thungela Resources warned shareholders that its revenues for January-June could decline by 85%, following unfavorable conditions in the international coal market. The company will release its report next week.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao surged to 96.5 USD/t, driven by higher consumption caused by extreme heat and reduced production, given heavy rains and government measures to combat overproduction.

Stockpiles have fallen below last year’s levels. Traders expect supply and material availability at ports to remain constrained until the beginning of next month. In addition to power plants, cement factories also lifted coal consumption last week, with their utilization rates rising to nearly 40%.

Furthermore, maintenance started at a significant number of mines, typically lasting seven days, while companies are awaiting government directives to suspend or reduce production ahead of the Victory Day celebrations on September 3. As a result, daily rail shipments via the Daqin rail line went down to 0.95 mio t/day compared to the usual 1.15–1.20 mio t/day.

Inventories at the 9 largest ports fell to a 10-month low of 23.85 mio t (-1.12 mio t w-o-w), while coal stocks at the 6 largest coastal TPPs totaled 13.56 mio t (-0.28 mio t). Daily consumption rose to 946 kt/day (+13 kt/day w-o-w).

Indonesian 5,900 GAR firmed above 74 USD/t, while the price of 4,200 GAR climbed above 42 USD/t, owing to rising indices and higher demand in China. South Korea and Japan also scaled up purchases amid high temperatures, which boosted demand for air conditioning.

Indonesia’s coal production in H1 2025 reached 357.6 mio t, accounting for 48.34% of the annual target of 739.7 mio t. Of this, 238 mio t were exported, 104.6 mio t supplied domestically, and 15 mio t remained in stockpiles.

Australian High-CV 6,000 slumped to 110 USD/t, following the European market, despite heatwaves in the Asia-Pacific. Meanwhile, medium-CV coal prices strengthened on steady demand from China. Production also declined, forcing some mining companies to purchase third-party coal to fulfill existing contracts.

Australia’s HCC metallurgical coal index jumped to 192 USD/t. Support came from supply concerns, as heavy rains limited the logistics capabilities of Australian suppliers on railway lines and at ports.

Additional drivers include rising quotations on the Singapore paper market and stable prices in China, where authorities took measures to curb coal overproduction.

Nevertheless, some market participants expect India to begin replenishing stockpiles for September-October after the monsoon season ends, which could boost demand activity in the second half of August.

Source: CCA Analysis