Last week, thermal coal indices in Europe rallied over 114 USD/t. Hot weather in some EU countries and raising gas quotes, strengthening to 31.7 EUR/MWh (+3.5 EUR/MWh to June 16, 2021), had a positive impact on coal prices. Heat waves in Europe boosted energy consumption resulting in stronger demand for coal. Lowering wind output in Europe to 425 GWh (-53 GWh to June 16, 2021) provided additional support to the coal indices. ARA coal stocks are 4.7 mio t (-0.1 mio t to June 16,2021).
Due to growing South African coal prices over 114 USD/t Indian generating enterprises and cement producers from Pakistan reduced coal imports from South Africa. Nevertheless, a number of deals for the purchase of medium-calorific coal of South African origin strengthened the quotes last week. Richards Bay coal stocks surged to 3.4 mio t (+0.5 mio t to June 16,2021).
The prices for 5500 kcal/kg NAR coal of domestic production in the port of Qinhuangdao exceeded 152 USD/t. On June 16, 2021, the partial suspension of coal production in a number of Chinese provinces amid public holidays supported coal quotes in the domestic market of China. In May 2021, China’s coal imports reached 21 mio t (-5% to May 2020). Due to limited supplies of material from Indonesia and Mongolia, China increased imports of Russian coal to 5 mio t (+112% to May 2020).
Limited supplies of Australian coal and demand from generating companies in APAC countries, caused by high seasonal electricity consumption in the region, boosted Australian coal prices over 130 USD/t.
On June 23, 2021, a derailment of a coal train interrupted coal supplies via the railway line, connecting the Dalrymple Bay coal terminal and the coal-producing provinces of Australia.
The Australian parliament blocked the government’s bill allowing the National Renewable Energy Agency to invest in oil, gas and coal production projects. By 2030, Australia plans to reduce CO2 emissions by 26-28% and increase investments in RES to 7 billion USD per year.
Heavy rains in the south of Indonesia limit the supply of coal of local production for export, stimulating 5900 GAR prices over 100 USD/t. High coal prices on the domestic market of China cause stronger demand of Chinese thermal power plants for imported material from Indonesia.
Australian coking coal indices reached two-year highs over 182 USD/t amid seasonal demand of steel mills in Southeast Asia for metallurgical coal. Due to the possible shortage of coking material at the end of Q3 2021, traders in the Asia-Pacific market increase the volume of purchases of Australian metallurgical coal.
Source: CAA Analytics
