Over the past week, the European thermal coal market quotations dropped below 300 USD/t amid the EU claims, that the regulator will manage to curb electricity prices through the measures applied to the gas market. Gas indices on the TTF exchange adjusted to 1,800 USD/1,000 m3 (-200 USD/1,000 m3 or -10% w-o-w), while electricity quotes slumped to 82.90 EUR/MWh (-229.03 EUR/MWh or -73% w-o-w). Coal stocks at ARA terminals decreased to 7.75 mio t (-0.13 mio t or -2% w-o-w).
The European Commission announced that it was discussing a price cap on gas, used in power generation. In addition, the International Energy Agency (IEA) published a report, forecasting a reduction in natural gas demand in Europe of more than 50 billion m3 by the end of 2022, representing a record fall in the last 50 years. By the year-end, the demand from the industrial sector is expected to decline by 20% and from the energy sector by 3%.
South African High-CV 6,000 indices dipped below 255 USD/t on improved coal shipments destined for the RBCT terminal via the Transnet rail line. The quotes were also under pressure, following lower demand from India and Pakistan, which are increasing consumption of more competitive Russian and Mozambican material.
China is celebrating Golden Week national holiday, bringing down trading activity with prices showing slight decline ahead of the close of the exchange during 1-7 October. Spot prices for 5,500 NAR at the port of Qinhuangdao corrected to 213 USD/t (-1 USD/t w-o-w).
Indonesian 5,900 GAR plunged to 191 USD/t, caused by low trading activity by Chinese buyers due to national holidays. Indian consumers also refrained from making deals because of the Dussehra religious festival.
High-CV Australian 6,000 coal prices declined below 405 USD/t on lower demand from India and Europe.
Australian metallurgical coal indexes strengthened to 275 USD/t on the expected deterioration in supply ahead of Australia’s rainy season and a possible strike at BHP’s Australian coal mines. The price was also supported by improved demand on the spot market.
Australian Foxleigh and two major Asian steelmakers (Japan’s Nippon Steel and South Korea’s POSCO) agreed Q3 2022 benchmark price for LV PCI at 243 USD/t FOB, down 38% from the record high of 396 USD/t FOB, fixed in the previous quarter. Negotiations on Q3 2022 Semi-Soft coal quotes are still ongoing (the benchmark for Q2 2022 was settled at a record level of 368 USD/t FOB).