World coal market: brief overview

Last week, thermal coal quotes on the European market plunged below 130 USD/t on the news about the possibility of another price decrease in the Chinese market, while Russian FOB Ust-Luga 6000 was kept at the level of 165 USD/t.

The drop in South African indices below 135 USD/t was also driven by the probability of lower coal prices in China. Growing demand from India and extremely low inventories at Richards Bay coal terminal may have a positive impact on South African coal quotations in the short term.

In China, spot prices for 5500 kcal/kg NAR FOB Qinhuangdao were in the range of 180-185 USD/t. On November 29, 2021, the National Development and Reform Commission of China (NDRC) called on state-owned coal producers to discuss improving the coal pricing mechanism. The last time such a meeting was held in late October 2021, having resulted in a government price cap in the coal mining sector.

Due to floods and unfavorable weather in several coal mining regions of Australia, a number of producers have announced force majeure that in the short term may positively affect the quotes of the Australian material, which currently stay below 165 USD/t.

The quotations of Indonesian 5900 kcal/kg GAR were in a sideways trend at the level of 140 USD/t amid the wait-and-see attitude of Asian traders, who expected a further price decrease.

Low demand for metallurgical coal on the Asia-Pacific market weighed on Australian coking coal indices, which fell below 315 USD/t.

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