Last week, European thermal coal quotations corrected below 265 USD/t. The prices were under pressure amid high coal inventories, growing import flows and stabilizing prices for gas and electricity.
The supplies of steam coal to Europe amounted to 1.2 mio t (+1 mio t w-o-w), driven by restocking for the winter period by energy companies. Therefore, coal stocks at ARA terminals increased up to 7.5 mio t (+0.3 mio t or +3% w-o-w).
South African High-CV 6,000 material prices dipped below $235/t, following the European indices, despite limited supply caused by low inventories and maintenance of one of the four shiploaders at Richards Bay Coal Terminal (RBCT).
In China, spot prices for 5,500 NAR at the port of Qinhuangdao rose to 195 USD/t (+15 USD/t w-o-w), boosted by the easing of anti-coronavirus restrictions. Seeking a balance between fighting the spread of COVID-19 and stimulating the economy, the Chinese government lifted a number of harsh quarantine measures as of December 07. The introduced adjustments and improved market sentiments are likely to spur the demand for imported material in the short-term.
Indonesian 5,900 GAR slipped to 162 USD/t (-2 USD/t w-o-w). At the same time, prices for Low-CV material are strengthening on the back of the supply decline and growth in Chinese demand, following the cold weather and the need to replenish stocks on the eve of the New Year holidays. The drop in supply is attributed, in particular, to an increase in domestic shipments and heavy rains in the main Kalimantan region.
Quotes for Australian High-CV 6,000 broke through the 400 USD/t mark and spiked above 415 USD/t on limited supply, due to continued rains in Australia amid higher demand in a number of consumption destinations, resulting from colder weather. Over the past week coal shipments were down 15% to 6.42 mio t, below the average weekly volume of 6.95 mio t for the last 12 months.
The Australian government is discussing the introduction of a price ceiling on thermal coal for the domestic market. Presumably, the ceiling will be set at 125 USD/t, as the previously discussed level of 70 USD/t will be below the production costs for some coal mining companies.
Metallurgical coal indexes continue to sit in the 245-250 USD/t range on expectations of seasonal restocking by end-users and Glencore’s statements on production cuts and coal capacity reductions in 2023-2024.
Source: CAA
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