Thermal coal indices on the European market remain in the upward trend. From June 10 till July 11 the expected reduction in nuclear output in Germany from 8.1 GW to 6.8 GW, as well as hot weather in a number of EU countries boosted coal quotes over 115 USD/t. TTF gas prices rose to 28.2 EUR/MWh (+2.0 EUR/MWh to June 02, 2021). EU carbon prices were 53.5 EUR /t (+2.1 EUR/t to June 02, 2021).
Lowering wind output in European countries to 509 GWh (-325 GWh to June 02, 2021) provided additional support to coal indices. ARA coal stocks totaled 5.0 mio t (unchanged to
June 02, 2021).
On June 04, 2021, the Colombian coal producer Cerrejon informed on a new blockade of its railway lines by former employees of the company. Railway lines connect Cerrejon’s coal-mining areas and the port of Bolivar.
Last week, South African coal quotes exceeded 115 USD/t amid heightened demand from India.
High demand for electricity, caused by warm weather in China, increased Chinese coal indices on the domestic market over 114 USD/t.
China’s National Development and Reform Commission (NDRC) plans to cap thermal coal prices at mines and loading ports to prevent further increase in coal indices ahead of the peak demand season in July and August.
Australian coal quotes continue to strengthen over 124 USD/t due to growing demand from generating enterprises in Japan, Taiwan and South Korea.
On June 09, 2021 Australian mining company Glencore and Japanese generating company Tohoku Electric agreed to supply Australian coal FOB Newcastle 6322 GAR to Japan at the price of 109.97 USD/t until March 2022.
The drought in Taiwan, which led to a reduction in the volume of hydrogenation, led to an increase in imports of Australian coal. Taipower said that the new Covid-19 restrictions may contribute to a further growth in electricity consumption, given mass shift of employees to remote work.
On June 09, 2021 the Japanese company Soma Kyodo Power announced resumption of power generation at the 1000 MW Shinchi 1 coal-fired power plant in September 2021. In February 2021 it was shut down due to an earthquake. The Shinchi 1 power plant consumes 4.5 mio t of coal per year.
The demand of Chinese generating enterprises for 5900 GAR Indonesian material supported the indices over 93 USD/t.
Rising prices for steel products, increased activity of large coal traders in the paper market, as well as stronger demand from some steel mills in the Asia-Pacific region had a positive impact on the coking coal indices from Australia over 165 USD/t.
The Australian producer Foxleigh, the Japanese steel company Nippon and the South Korean mining company POSCO approved the benchmark price of low-volatile PCI coal for Q2-2021 at 100 USD/t FOB (no change to the price for Q1-2021).
Source: CAA Analytics
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