Last week, the European thermal coal indices remained over 170 USD/t, supported by gas indices, which renewed their all-time highs amid tight inventories in the EU gas storages. Owing to more attractive gas prices in Asia, LNG suppliers increase shipments to this region, creating a supply shortage on the European gas market. October TTF gas quotes skyrocketed to 834 USD/1,000 m3 (+144 USD/1,000 m3 to September 08, 2021) or 71.2 EUR/MWh (+14.9 EUR/MWh to September 08, 2021). Wind output in the EU countries plunged to 524 GWh (-148 GWh to September 08, 2021). ARA coal stocks declined to 4.6 mio t (-0.2 mio t to September 08, 2021). According to experts, the current gas quotes are overpriced due to speculative trading on uncertainty about the timing of Nord Stream-2 commissioning.
Indices of South African material continued to strengthen above 157 USD/t, driven by supply issues on the railway line connecting the coal-mining provinces of South Africa with the port of Richards Bay. Coal stocks at Richards Bay terminals inched higher to 3.2 mio t (+0.1 mio t to September 08, 2021).
Prices of 5500 kcal/kg NAR coal of domestic production in the port of Qinhuangdao climbed over 190 USD/t amid limited supply on the Chinese domestic market. On September 10, 2021, National Development and Reform Commission of China (NDRC) met with major coal producers and energy companies to boost supplies and stabilize prices in the coming months. The Chinese government has restricted rail traffic and coal mining in Shaanxi province due to the 14th National Games of China (September 15-27, 2021).
Australian coal quotes rose above 180 USD/t. Strong trading activity by Asian consumers, who are restocking ahead of the winter season, positively impacted indices of the Australian material.
The state of emergency introduced in Indonesia from September 04 to September 17, 2021, owing to heavy rains and floods, which also became the cause of force majeure announced by a number of local mining companies led to further increase in the prices of Indonesian 5900 kcal/kg GAR above 135 USD/t.
The limited supply of coking coal by key coal-mining countries, as well as high prices in the PRC domestic market, forced Chinese steel mills to buy Australian material from Asian traders, strengthening indices of the Australian material above 350 USD/t.
Source: CAA Analytics
