World coal market: brief overview

Last week, the quotations of thermal coal in the EU again pulled back from the historical highs below 295 USD/t amid easing fears of Russian supply disruptions, owing to the positive developments in the negotiations between Russia and Ukraine. The entire energy market in Europe, including oil and gas prices, also showed a decline. At the same time, German leading energy company RWE warned that a hasty ban on Russian coal would hurt households and industry, while a shift to coal from other countries could lead to further price upside. Coal stocks at ARA terminals decreased to 2.7 mio t (-0.3 mio t w-o-w).

Indices of South African material also fell below 240 USD/t, despite South Africa is still experiencing a supply shortage, on the back of declining production and exports. In 2021 coal extraction amounted to 229 mio t (-18 mio t or -8% y-o-y), while exports fell to 66.2 mio t (-8.7 mio t or -12% y-o-y) the lowest level in more than 20 years.

In China, spot prices for 5500 NAR strengthened by 10.00 USD/t to 246 USD/t FOB Qinhuangdao. Quotes of thermal material in the Chinese domestic market continued to rise, that was partly due to the uncertainty of coal supply in connection with the expected maintenance of the Daqin railway line, that will be within 25 days of April. Also, China is currently experiencing a COVID-19 outbreak, which along with heavy rains in northern provinces and safety inspections at mines is hampering supply growth.

Australian coal high-CV index 6000 adjusted below 320 USD/t. At the same time, the vessels queue at Australian ports increased significantly, resulting from the temporary closure of the railroad leading to the port of Brisbane caused by heavy rains and floods.

Indonesian material 5900 GAR fell to 238 USD/t, following a general downward trend on global markets. According to market participants the authorities are putting pressure on local coal companies to ensure supplies to the domestic market because of the current deficit, which is estimated at 13 mio t for this year. Some exporters fear that the authorities may re-impose a temporary export ban.

The shortage of metallurgical coal supply on the world market amid heavy rains, storms and floods in Australia, as well as the attempt to replace Russian coal with shipments from other countries supported the indices of Australian metallurgical material above 665 USD/t.

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