Last week the European thermal coal market saw the quotations drop below 109 USD/t. The downtrend persists, while prices continue to be pressured by such factors as increased RES generation, favorable temperatures, high stocks at ARA terminals and falling indices on the gas and electricity market.
Gas quotes at the TTF hub plunged to 280 USD/1,000 m3 (-74 USD/1,000 m3 w-o-w). Inventories at EU gas storage facilities keep rising, driven by steady pipeline gas and LNG supplies.
Coal stocks at ARA terminals go up for the fifth consecutive week to 7.8 mio t (+0.4 mio t or +6%w-o-w), its highest level since September 2022.
South African High-CV 6,000 strengthened above 106 USD/t, that was caused by 2 crashes on the railroad leading to the Richards Bay Coal Terminal (RBCT). The rise in quotations was preceded by a drop to two-year lows on the back of low demand in Europe and India, as well as increased competition in the global market.
A new case of railcar derailment occurred on May 17, 2023, near Kleinfontein, when a train carrying coal collided with a parked rolling stock. At the same time on May 22, 2023, the traffic was fully restored. The authorities are currently assessing the causes and impact of the incident on the volume of exports through the RBCT terminal.
In China, spot prices for 5,500 NAR at the port of Qinhuangdao were down 7 USD/t to 135 USD/t, given record inventories at consumers’ stockpiles, reduced demand and high production rates.
Shenhua, China’s largest coal company, suspended purchases of low-grade coal and cut prices for higher-grade coal in response to declining quotes on domestic and international markets.
Stocks at the Qinhuangdao port climbed to 6.1 mio t (+0.1 mio t w-o-w), while total inventories at 9 major terminals rose to 29.2 mio t (+1.2 mio t w-o-w).
Indonesian 5,900 GAR totaled 105 USD/t (-8 USD/t w-o-w), on the weakening spot demand for all grades of coal coming from India and China, where hydro generation is on the rise.
High-CV Australian 6,000 dipped below 150 USD/t under pressure from a combination of negative factors, including weak demand and high stockpiles in Europe and the Asia-Pacific.
Australian metallurgical coal prices tumbled below 225 USD/t due to supplies exceeding demand as well as unfavorable market conditions in China, where steel prices reached a three-year low, causing cuts in pig iron production, while maintenance is carried out at a number of plants.
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