Last week, thermal coal indices in the European market weakened below 84 USD/t amid lower natural gas prices and the high cost of EU carbon prices. TTF gas quotes fell to 23.0 EUR/MWh (-3.0 EUR /MWh to May 12, 2021) as the US Congress decided not to impose sanctions on the participants of Nord Stream 2 project and Norwegian LNG processing plants resumed operations after scheduled maintenance. EU carbon prices remain at historical highs of 49.3 EUR/t (-4.7 EUR/t to May 12, 2021). ARA coal stocks amounted to 4.4 mio t (-0.1 mio t to May 12, 2021).
Lower Richards Bays stocks and plans of the railway operator Transnet to carry out repairs in June-July 2021 keep the quotes of high-calorific coal from South Africa at two-year highs of 104-105 USD/t. Nevertheless, deteriorating epidemiological situation in India negatively affected the demand of Indian enterprises for medium-calorific South African coal, putting pressure on the indices below 72 USD/t.
On May 17, 2021 South African company South32 announced the sale of its majority stake in SA Energy Coal Holdings (SAEC) to Seriti Resources Holdings. This decision is motivated by South32 seeking to exit high-carbon footprint assets.
Last week, coal indices continued to strengthen in the domestic market of China. As of May 19, 2021, the prices of 5500 kcal/kg NAR coal in the port of Qinhuandao increased over 142 USD/t.
The growth in the trading activity of Asian consumers had a positive impact on the indices of the Australian material, strengthening them over 100 USD/t.
Last week, during the international Steel and Mining conference, representatives of BHP and Anglo American announced a strategy of natural depletion of their metallurgical coal reserves. This approach assumes no investment in new coal projects, as well as the gradual sale of all coal assets. According to the company’s management, it is necessary to increase the production and export of copper, nickel and potassium, i.e. raw materials, the consumption of which is associated with low emissions.
The demand of Chinese generating enterprises for 5900 GAR coal from Indonesia firmed the quotes of Indonesian material over 93 USD/t.
Stronger demand for Australian coking coal from metallurgical plants in the Asia-Pacific region continues to boost coal quotes from Australia over 130 USD/t.
Source: CAA Analytics
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