Over the past week, thermal coal quotes in Europe continued to sink below 138 USD/t after a slight upward correction.
Gas contracts on the TTF hub firmed marginally to 655 USD/1,000 m3 (+15 USD/1,000 m3 w-o-w), supported by more active gas intake from EU storage facilities. Overall, in the medium term, coal indices remain under pressure, resulting from a combination of such negative factors as above-normal temperatures, high coal inventories at ARA terminals as well as gas prices sitting at their lows over the last 1.5 years.
South African High-CV 6,000 quotations climbed above 145 USD/t on higher demand from India on the spot market.
South African Richards Bay Coal Terminal (RBCT) announced plans to boost transshipment in 2023 up to 60 mio t (+19% to 2022). This is an ambitious target, since South African exports fell to 50.4 mio t in 2022. At the same time, the RBCT’s design capacity is 91 mio t/year. India remains the key export destination for RBCT supplies, with a volume of 15.5 mio t (-8.6 mio t or -36% to 2022). Shipments to Pakistan dropped to 3.0 mio t (-8.4 mio t or -74% y-o-y).
Deliveries to Europe jumped six-fold, to 14.3 mio t against 2.3 mio t in 2021, while exports to Morocco soared roughly two-fold, from 0.5 mio t to 1.2 mio t.
In China, spot prices for 5,500 NAR in the port of Qinhuangdao lowered to 175 USD/t (-5 USD/t w-o-w), on high stocks in the ports, forecasts of further increase of domestic production and easing of restrictions on Australian coal imports. Also, last week Qinhuangdao port hiked rates for coal storage, forcing traders to sell their stockpiles more actively, increasing the discount.
Indonesian 5,900 GAR declined to 140 USD/t (-3 USD/t w-o-w) due to ongoing low trade activity from the Asia-Pacific consumers.
High-CV Australian 6,000 tumbled below the level of 250 USD/t by almost 60 USD/t. Prices for Australian coal fell sharply as market participants took a wait-and-see approach amid low demand from India and China. Additional pressure on quotations is provided by high stocks in the Southeast Asia and the competitiveness of South African and Russian material offered at more attractive prices.
Australian metallurgical coal indices spiked to 350 USD/t on concerns of reduced supply, following the rail accident in Queensland.
On January 29, coal railcars and a freight train crashed on the Blackwater railroad in Queensland, shutting down the route for repairs until February 09. Moreover, the rail line will reopen a week later than previously expected. However, once railroad service resumes, the speed of railcars will be limited for about 3 months as some of the equipment needs to be replaced. This rail line serves coal shipments to the Port of Gladstone. According to some estimates, coal exports through Gladstone will be reduced by approximately 1.5 mio t of coal because of infrastructure damage. About 50% of Queensland’s PCI coal is delivered via the Blackwater rail line, making the Port of Gladstone the largest transshipment hub of Australian PCI coal for export.
Japanese steel producer Nippon Steel and Australian coal mining company Foxleigh from Queensland agreed on LV PCI benchmark price for Q1 2023 at 255 USD/t FOB (+9 USD/t to Q4 2022).
Source: CAA
