Last week, thermal coal prices in the EU reached two-year highs, exceeding 80 USD/t. News on suspension of Sino-Australian economic dialogue, a decrease in average daily temperatures in a number of European countries and a surge in TTF gas prices to 24.8 EUR/MWh (+3.2 EUR/MWh to April 28, 2021) supported coal quotes.
EU carbon prices edged higher to 50 EUR/t, which is the highest figure since the introduction of this instrument to the stock exchange in 2005. ARA coal stocks amounted to 4.3 mio t (+0.3 mio t or +9% to April 28, 2021).
Limited coal supplies due to repair works on the railway line, connecting the coal provinces of South Africa and the port of Richards Bay, boosted South African coal indices over 100 USD/t. On May 06, 2021 South African operator Transnet plans to resume shipments of coal by rail.
Richards Bay coal stocks amounted to 3.1 mio t (-0.1 mio t to April 28, 2021). In addition, amid deteriorating epidemiological situation in the country the management of the port of Richards Bay decided to tighten customs procedures and clearance of vessels.
High demand from Korean generating enterprises for Australian thermal coal amid limited export supplies of the material strengthened the quotes of Australian thermal material over 94 USD/t. In March 2021, Australian thermal coal exports reached 13.5 mio t (-4.70 mio t to March 2020). This is the lowest figure since March 2013. The main reasons for the drop in exports are the Chinese government’s ban on the import of Australian coal, introduced in 2020, as well as the floods in Australia at the end of March 2021, inundating some coal mines.
The demand of Chinese generating enterprises for Indonesian 5900 GAR coal provided support to indices over 88 USD/t. Market participants expect further growth in business activity after the end of the public holidays.
Stronger demand from metallurgical plants in the Asia-Pacific region for Australian coking coal had a positive impact on the dynamics of coal quotes from Australia, strengthening over 108 USD/t.
Source: CAA Analytics
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