Over the past week, thermal coal prices on the European market rose above 130 USD/t. Quotes continue to be supported by the reduction in stocks, as well as high gas prices, which strengthened again on the back of a possible resumption of the strike by workers of the oil and gas company Chevron in Australia, after the trade unions refused to accept the final version of the draft agreement received from the company’s officials.
Gas prices at the TTF hub climbed to 428 USD/1,000 m3 (+15 USD/1,000 m3 w-o-w) despite an increase in Norwegian gas supplies.
Total coal stocks at ARA terminals decreased to 7 mio t (-0.1 mio t or -1.4% w-o-w).
South African High-CV 6,000 was holding above 130 USD/t amid steady demand from India and China, as well as an expected decline in South African exports in September.
Glencore intends to lay off about 214 miners at the iMpunzi mine (thermal coal capacity 6.7 mtpa) in Mpumalanga province, arguing for rail infrastructure issues and price volatility.
In China, spot prices for 5,500 NAR at the port of Qinhuangdao went up by 2 USD/t to 137 USD/t. The upward movement in quotes continued due to production cuts in several provinces, resulting from temporary capacity shutdowns, caused by safety inspections and a new fatality, as well as maintenance on the Daqin rail line in October and restocking ahead of the China’s National Day celebrations (Sept. 29-Oct. 6).
On September 24, a coal mine fire in Southwest China’s Guizhou Province killed 16 people. Additional inspections and production cutbacks are expected to avoid further accidents.
Indonesian 5,900 GAR added 1 USD/t to 92 USD/t on strong demand from China and India. In addition, the tight supply was exacerbated on September 22 by a disruption in coal loading caused by a technical glitch in the data processing system, a factor that may force some suppliers to declare force majeure.
Australian High-CV 6,000 fell below 160 USD/t, following lower activity and a wide spread between supply and demand prices. During the Coaltrans Asia conference, market participants said they expect Australian thermal coal imports by Chinese consumers to remain at least 5 mio t per month until the end of 2023.
Negotiations are nearing between Glencore and Japan’s Tohoku Electric on a contract for the period from October 01, 2023 to September 30, 2024. According to market participants, Tohoku Electric expects prices below 160 USD/t, FOB Newcastle, 6322 GAR, while Glencore’s offer is at 200 USD/t. If the parties fail to agree, they may temporarily use coal index or spot quotes. The Japanese company is in a more favorable position as it has sufficient stocks, that is in sharp contrast to last year’s situation on the market.
Limited supply and robust demand from consumers in Asia and India keep pushing Australian HCC metallurgical coal prices above 330 USD/t. China’s Guizhou Panjiang Refined Coal, where an accident, involving a fire and the death of workers at a 3.1 mi t of metallurgical coal mine occurred, has started safety inspections, which are expected to worsen the supply of the material in the southwestern region of China. The strengthening of Australian PCI coal quotations up to 200 USD/t was also supported by concerns over shipments from Russia, where the authorities announced the introduction of an export duty.