World coal market: brief overview

Over the past week, thermal coal quotes on the European market again hit the level of 200 USD/t, following the continuing supply shortage on the global market. An additional factor for the price growth was the reduction of the nuclear power target for 2022 by the French energy group EDF to a record low of 295-315TWh, resulting from ongoing inspections and maintenance works at the company’s nuclear power plants. In line with this, the French government announced an increase in coal consumption limits amid winter power supply issues.

Coal stocks at ARA terminals kept decreasing, having totaled 3.4 mio t (-0.1 mio t w-o-w).

South African coal indices strengthened above 200 USD/t amid a spike in domestic prices in China and a persistent supply deficit on the international market. Coal stocks at Richards Bay Coal Terminal (RBCT) climbed to 2.2 mio t. (+0.2 mio t w-o-w), still sitting at 5-year lows.

In China, spot prices for 5,500 NAR surged by 12 USD/t to 188 USD/t FOB Qinhuangdao. Additional safety and environmental inspections during the Olympic Games in Beijing (February 04-20, 2022) as well as the suspension of some mines in Shanxi province led to the upturn in coal quotations on the Chinese domestic market.

On February 09, 2022, the China’s National Development and Reform Commission (NDRC) announced that FOB 5500 spot prices should be capped at 142 USD/t instead of previously reported 158 USD/t.

High trading activity of Asian consumers, who returned to the market after the New Year holidays (January 31-February 06, 2022) had a positive effect on the indexes of Australian material above 245 USD/t.

High demand from China and India firmed Indonesian 5900 GAR quotes to 136 USD/t FOB Kalimantan. Indonesia’s Ministry of Energy and Mineral Resources suspended mining permits of 81 coal companies for not submitting production schedules and budgets for 2022.

Australian metallurgical coal indices slightly corrected below 440 USD/t, still holding at historical highs amid limited supply on the world market.

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