Over the past week, European thermal coal quotations dropped to 116-118 USD/t level. The pressure on prices is still being exerted by such factors as rising temperatures, strong RES generation, increased stocks at ARA terminals as well as the downtrend on the gas and electricity market. Given the low demand, some market participants and even consumers started reselling material from Europe to Turkey, North Africa and China.
Gas prices at the TTF hub fell to 394 USD/1,000 m3 (-26.3 USD/1,000 m3 w-o-w). Europe continues to add gas to storages, owing to stable supplies of pipeline gas and LNG.
South African High-CV 6,000 slumped below 110 USD/t on low demand from Europe. Shrinking demand was also seen in India, where stockpiles of power plants climbed 2% in the past week as generation fell after the weakening of the heatwave.
South African coal exports through the Richards Bay Coal terminal (RBCT) were up 4.4 mio t in April. (+0.4 mio t or +10% vs. March 2023). In May and June the positive dynamics is expected to persist. However, for the 4 months of 2023, total supplies amounted to 15.5 mio t (-2.4 mio t to January-April 2022).
In China, spot prices for 5,500 NAR at the port of Qinhuangdao decreased by 2 USD/t to 143 USD/t on the back of record consumers inventories and reduced production in the construction, generation and other sectors.
China Energy, China’s largest coal company, chose to cut production and purchases in Inner Mongolia and Shanxi provinces to avoid overstocking. The company is also considering further reductions in third-party coal purchases and is urging its facilities to begin maintenance in order to reduce the supply.
Indonesian 5,900 GAR stood at 118 USD/t (-2 USD/t w-o-w), while the price for Indonesian Low-CV 4,200 GAR increased to 73 USD/t (+1 USD w-o-w). The quotes moved in mixed directions, resulting from the limited supply, which provided support only for Indonesian Low-CV material prices. A recent mudslide negatively impacted Jhonlin’s supply in South Kalimantan, causing May and June shipments to be postponed until July.
High-CV Australian 6,000 collapsed below 170 USD/t because of slowing demand from European and Asian consumers. Australian steam coal exports in Q1 2023 rose 1% to 45 mio t. Japan remained the main importer, accounting for 19 mio t.
Australian metallurgical coal prices surged above 240 USD/t, driven by improved demand from India, South Korea and some other Asian countries. Additional support was provided by the Chinese authorities’ decision to cancel permits to expand capacities at a number of coal mines, where it was expected to boost production of metallurgical material by about 7-8 mio t a year.