Last week, thermal coal prices on the European market surged above 145 USD/t on the back of rising gas and oil quotations, stemming from the escalation of the armed conflict in the Middle East. Indices were also supported by a noticeable reduction in inventories at ARA terminals, despite the supply increase, which indicates the growth in consumption.
Gas prices at the TTF hub soared to 542.4 USD/1,000 m3 (+33.6 USD/1,000 m3 w-o-w), driven by outages at several fields in Norway, the geopolitical situation and the suspension of gas production at the Tamar field in Israel.
Coal stocks at ARA terminal fell to 6.7 mio t (-0.5 mio or -6.4% w-o-w).
South African High-CV 6,000 keeps trading at 135 USD/t, supported by the growing energy market in Europe and steady demand from India.
The South African authorities conducted an operation to identify and suppress the activities of a group that played a significant role in the country’s energy crisis, as it was engaged in substituting coal, sent to Eskom power plants, with lower-quality material in order to sell higher-quality grades for export.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao adjusted downward by 2 USD/t to 142 USD/t. Pressure on quotations was exerted by the higher production and stockpiles in the country’s seaports. In addition, market participants expect quotes to decline, following the resumption of full operation of the Daqin railway line on October 18 and the authorities’ appeal to the largest companies to step up coal extraction for building up sufficient reserves ahead of the winter period.
China’s coal production in September reached 393 mio t (+11 mio t or +2.8% m-o-m). At the same time, the daily figure amounted to 13.1 mio t (+0.8 mio t or +6.2% to August 2023). This growth occurred despite the restriction and suspension of extraction at some facilities after several accidents.
Coal inventories at Qinhuangdao port decreased to 5.0 mio t from 5.2 mio t, however, combined stocks at the 9 largest ports rose to 24.6 mio t (+0.6 mio t w-o-w).
Indonesian 5,900 GAR climbed to 98 USD/t (+2 USD/t) due to uncertainty over the approval of applications for higher mining quotas for Indonesian companies.
Australian High-CV 6,000 slipped below 140 USD/t on correction after recent gains.
The price growth of Australian HCC metallurgical coal paused. The quotes fell to 345 USD/t, despite limited supply. At the same time, some market participants expressed concerns about the stability of current prices, given the possible limitation of Chinese coke production, related to negative margins.