Over the past week, thermal coal indices in Europe inched up to 53.5 USD/t. News about new vaccines against coronavirus had a positive impact on global financial and energy markets.
ARA coal reserves fell to a record low of 5.87 mio t since October 2018, supporting coal prices. In addition, the ongoing strike of Cerrejon’s miners go on strengthening indices as well.
However, the increase in electricity generation by windmills in the EU and the declining TTF gas prices limit the growth of coal quotes.
South African coal prices edged up this week amid increased demand of Chinese enterprises seeking to compensate for lost volumes of Australian coal. An additional factor, boosting coal quotes, is the expected strike of Exxaro’s miners in South Africa in January 2021.
The main demand of strikers is to raise the minimum wage by 7.5% for all employees of the company’s enterprises.
Lowering Chinese buyers’ demand for Australian coal following the Chinese government’s ban on energy material imports from Australia continues to put pressure on indices.
Infrastructure outage at coal terminal of the port of Newcastle (Australia) after last week’s hurricane limits coal shipments and keeps quotes at the current level.
During November 11-13, 2020, the 10th coal summit, reviewing the results of the 13th five-year plan (2016-2020) for Chinese coal industry and forecasts for 2021, was held in China. The key result of the 13th five-year plan was the reduction of 820.00 mio t of inefficient coal capacities.
Conference participants agreed that coal imports to the country in 2021 will remain limited. Coal imports to China in Q1-Q3 2020 amounted to 240.00 mio t. (-4% y-o-y), including thermal coal 180.00 mio t (-5%) and coking material 59.00 mio t (-3%).
Lower demand of Chinese companies led to weaker prices for thermal coal from Indonesia.
Weaker bidding interest of Chinese metallurgical enterprises for Australian coking coal due to restrictive measures of the Chinese government had a negative impact on quotes. Chinese steel mills have shifted their focus to metallurgical material from Mongolia.
Source: CAA Analytics
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