Last week thermal coal indices in Europe saw an uptrend, surging over 71 USD/t. The growth in coal quotes was associated with the positive dynamics of Brent oil prices up to 66.29 USD / barrel (+4.29 USD/barrel to April 07,2021) after the publication of data on oil stocks in the United States, and with unexpected decrease in temperatures in a number of European countries, which led to stronger coal demand by local power plants. Lowering wind generation to 1017 GWh (-809 GWh to April 07,2021) in the European countries provided additional support to coal indices. Nevertheless, higher EU carbon prices at 43.73 EUR/t are holding back further growth in coal quotes.
Expensive coal from South Africa and the availability of material in the domestic market of India discouraged Indian buyers and weakened South African indices below 91 USD/t. Coal stocks of the Indian state-owned company CIL are 100 mio t (+23 mio t to March 01, 2021).
Lowering trading activity of Indian enterprises in the run-up to monsoon season, as well as the availability of material in the domestic market of India, had a negative impact on demand from Indian coal companies and depressed the Australian coal prices below 92 USD/t.
In March 2021, Australia’s coal exports totaled 27.2 mo t (-4.3 mio t or -14% to March 2020 and -2.4 mio t or -8% to February 2021). The reason behind the decline in export volumes was the floods in New South Wales (Australia), hitting some coal mines.
Heightened demand of Chinese generating enterprises for low-calorific coal from Indonesia strengthened Indonesian coal quotes over 78 USD/t.
The Indonesian government raised the cap on coal production in the country to 625 mio t in 2021 (+75 mio t to the initial quota for 2021). In 2020, the total volume of coal production in the country rose to 563 mio t, while exports amounted to 407 mio t.
Weaker demand from metallurgical plants in the Asia-Pacific region amid falling steel prices negatively affected Australian coking coal indices below 110.5 USD/t.
Source: CAA Analytics
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