Last week the European thermal coal market saw a recovery of quotations above 145 USD/t after a decrease a week earlier.
The price strengthening was caused by falling temperatures in Europe, reduction in wind generation, as well as easing of fears over the US banking crisis.
Temperatures in almost all EU countries in the first half of the week were below the climate norm.
Gas indices on the TTF hub rose to 480 USD/1,000 m3 (+35 USD/1,000 m3 w-o-w). Gas intake from underground storage facilities in Europe increased sharply to a five-year high on a daily basis as of March 28.
South African High-CV 6,000 consolidated above $133/t, following the European energy market.
Additional support was provided by steady demand from India. Some market participants expect the supply of South African High-CV material to decline due to logistical issues in exporting from RBCT.
In China, spot prices for 5,500 NAR at the port of Qinhuangdao lost 3 USD/t dropping to 158 USD/t.
The quotes in the Chinese domestic market continued to shrink in response to the weak demand and the growth in the volume of production and supply.
Additional pressure on the indices was brought by the hike in hydro generation and the government’s initiative, regarding the zero-import duty on coal imports.
Coal companies in Shaanxi province are ramping up production by restarting a number of mines that were previously mothballed because of risks of collapse or environmental violations.
In the Shenmu region, the Shenmu Energy company was ordered to boost the production and supply by 10 mio t from five previously suspended mines.
At the same time, the annual production could increase by 30-40 mio t if all 17 such facilities are launched.
Stocks at Qinhuangdao port climbed to 6.3 mio t (+0.4 mio t), while inventories at the 9 largest Chinese northern ports rose to 26.9 mio t (+0.3 mio t).
To ensure its energy security, the Chinese authorities extended the zero-import duty on coal until the end of 2023 (the import duty on coal was abolished from mid-2022 to March 31, 2023), and currently it will be applied to the other exporting countries.
It is expected that this initiative can make Russian coal more attractive to Chinese consumers compared to Australian material.
Indonesian 5,900 GAR stood at 119.3 USD/t (+0.3 USD/t w-o-w), resulting from low activity on the local market linked to Ramadan holidays (March 22-April 21).
High-CV Australian 6,000 surged above 175 USD/t on the back of ongoing negotiations between Glencore and Japanese power company Tohoku Electric on supplies of High-CV 6,322 GAR material for the next fiscal year.
According to some estimates, the parties may reach an agreement by April 01with a benchmark set at around 200 USD/t FOB.
Australian metallurgical coal indices slumped to 310 USD/t, following an increase in supply and a wait-and-see attitude by most consumers, caused by a lack of improvement in steel market conditions as well as a reduction in prices on the spot market by Australian traders.
An Australian mining company operating in Hunter Valley has agreed with Japanese metallurgical companies on a benchmark price for semi-soft coal for Q1 2023 at 267.95 USD/t FOB, or 85% of the prime hard coking coal quote (315.22 USD/t FOB).
Thus, the new price for semi-soft exceeded the benchmark of the previous quarter by 16.5% (230 USD/t FOB).
Source: CCA Analytics