Last week European thermal coal quotations kept strengthening above 145 USD/t, driven by a drop in temperature by 3-4 degrees below normal and a significant reduction in wind generation volumes.
Meanwhile, gas contracts at the TTF hub fell to 531 USD/1,000 m3 (-9 USD/1,000 m3 w-o-w) on the back of firm supplies from Norway and Russia. Currently, European gas storage capacities are 61% full.
South African High-CV 6,000 prices rose above 135 USD/t, resulting from the growth in European indices, logistical constraints and increased demand from Indian consumers.
Based on preliminary data, exports through South Africa’s Richards Bay Coal Terminal (RBCT) dropped to 7.1 mio t in the first two months of 2023 (-2.1 mio t or -23% vs. Jan-Feb 2022). In addition, last week the visit of the President of South Africa to the event organized by the Ministry of Defense, led to a traffic jam of trucks (about 2,000 units) on their way to the RBCT terminal. In this regard, the operator Transnet has sent a notice to shippers, asking them to suspend supplies for at least 48 hours.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao climbed by 18 USD/t to 171 USD/t due to expectations of reduced production after an accident at a coal mine in the Inner Mongolia region, as well as lower stocks at ports and power plants.
On February 22, 80 meters high wall of sand and rocks collapsed at a mine owned by the private company Xinjing Coal Mine (producing about 1 mio t/year) in the Inner Mongolia region. As a result of the accident 6 workers were killed and 48 were missing. Chinese President Xi Jinping took the investigation under his personal supervision, that may cause a sharp increase in inspections of coal mines for violations. Along with other regions, Shanxi provincial authorities initiated a 100-day campaign to improve safety, prompting some mines to conduct inspections and cut production.
Indonesian 5,900 GAR added 1 USD/t to 134 USD/t on increased activity from Chinese and Indian buyers.
Indonesia’s Adaro Energy plans to ramp up its output to 62-64 mio t in 2023 after a record 63 mio t, extracted in 2022 (+19%y-o-y). The producer expects strong coal demand to continue on the international market in 2023.
High-CV Australian 6,000 went up to 185 USD/t amid higher demand from Asia-Pacific countries, including China, where there was a rock collapse at one of the mines.
The operator of the Australian coal terminal Dalrymple Bay, in its report published last week, indicated that in February at least 5 vessels with steam and metallurgical coal were sent to Chinese ports (Qingdao, Tangshen, Xiamen and Zhoushan), confirming the gradual lifting of the ban on the imports of Australian material by China.
After a prolonged upward spike Australian metallurgical coal indices dropped to 360 USD/t after a prolonged upward spike on easing fears of supply cuts. Market participants note that current price levels are discouraging a number of buyers specifically as coke imports to India are becoming more cost effective.
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