Over the past week, European thermal coal market quotations moved below 120 USD/t, after a significant rise a week earlier, amid gas prices correction and reduced coal consumption. High volatility persisted on the gas market, following news on Norwegian gas supply disruptions after series of unplanned outages at LNG terminals and gas fields. Gas indices at the TTF hub amounted to 425 USD/1,000 m3 (-5 USD/1,000 m3 w-o-w).
Coal stocks at ARA terminals totaled 7.3 mio t (-0.13 mio t w-o-w), while reserves in European underground gas storage facilities increased to 75% (+17% y-o-y).
South African High-CV 6,000 stood at the level of $100/t. Pressure on coal prices was exerted by the correction in the European market and limited demand, with market participants expecting confirmation that quotes have bottomed out. Pakistani cement producers are showing some recovery in demand for South African material, despite the currency crisis in the country.
In May 2023, coal shipments through the Richards Bay Coal Terminal (RBCT) fell to 4.1 mio t (-0.3 mio t or -5% m-o-m), resulting from two incidents with railcars derailment. In January-May 2023, exports amounted to
19.5 mio t, thus the total volume in CY 2023 may drop to 47.2 mio t (-3.1 mio t or -6% by 2022), which will become a historic low for more than the last 30 years. With scheduled maintenance within July 11-20, coal supplies are expected to decline further next month.
In China, spot prices for 5,500 NAR at the port of Qinhuangdao climbed by 8 USD/t to 114 USD/t. The Chinese domestic market saw a noticeable price strengthening on the back of heat waves in some northern provinces of
China and inspections, initiated by the regulator in Shanxi province after the accident, involving death of three workers at the mine of the state-owned China Coal company on June 15, caused by malfunctioning of underground elevator systems. The safety inspections will continue from June 16 to July 19.
Indonesian 5,900 GAR dipped to 91.5 USD/t (-1.7 USD/t w-o-w), that was attributed to low demand from India and China, where inventories remain at high levels. The Chinese demand is also limited because of the depreciation of CNY against USD and the growth of economic indicators below expectations.
High-CV Australian 6,000 tumbled below 120 USD/t, continuing to hit new lows since June 2021. Buyers are in no hurry to enter into spot contracts as temperatures are forecasted to be moderate for most parts of Northeast Asia.
Australian metallurgical coal quotes strengthened above 230 USD/t, driven by improved conditions on the steel market.
Prices were also supported by reports on possible reduction of domestic supply in China, as the state-owned company China Coal in Shanxi province suspended operations at 6 mines with the capacity of 5.7 mio t of metallurgical coal per year as a result of the fatal accident for several workers.