Tough measures taken by the National Development and Reform Commission of China (NDRC) to regulate the domestic market were the main factor behind the decline in thermal coal indices worldwide. Bearish sentiment in China is weighing on both the Atlantic and Asia-Pacific, resulting in price correction below 200 USD/t at key global coal hubs.
For the first time since late September 2021, November TTF gas quotes fell below 915 USD/1,000 m3 (76.5 EUR/MWh) after Vladimir Putin instructed Gazprom to fill the company’s gas storage facilities in Europe. ARA coal stocks waned further to 3.8 mio t (-0.1 mio t or -2.6% w-o-w).
South African indices followed the trend of European quotations, dipping below 170 USD/ t. Suppliers continue to experience difficulties with coal deliveries to the port of Richards Bay (RBCT) due to ongoing issues on Transnet’s railway line.
NDRC continues to put pressure on coal producers and traders in China. The authorities of the main coal mining regions Shanxi, Inner Mongolia and Shaanxi urged local suppliers to reduce the prices for the material 5,500 kcal/kg NAR to 188 USD/t from the previously established level of 235 USD/t. Currently, ex-mine prices stand at 286 USD/t in Shanxi province and 253 USD/t at Inner Mongolia, while spot quotes are in a range of 313-329 USD/t, FOB Qinhuangdao. The decrease in prices amounted to about 78 USD/t for the week.
Coal indices in Indonesian and Australian markets corrected amid tightening of regulations by Chinese government and the continuing price decline in China. The quotes of Indonesian material 5900 kcal/kg GAR plunged below 215 USD/t, FOB Kalimantan.
Australian NEWC 6,000 kcal/kg fell below 190 USD/t. An additional factor, putting pressure on the quotes of Australian material was the decline in LNG prices in Asia-Pacific. The price of liquefied gas contracts for the upcoming winter period in Korea and Japan decreased from 50 USD/mio BTU in early October to current values of 33 USD/mio BTU.
Australian metallurgical coal prices strengthened above 400 USD/t after a slight correction a week earlier.
Source: CAA Analytics