European Thermal Coal Market Strengthens AmidGeopolitical...

European Thermal Coal Market Strengthens AmidGeopolitical Tensions

By Matthew Warder

European thermal coal prices rose to $122-124 per tonne this past week, driven by escalating conflicts in the Middle East and a Ukrainian attack on a key Russian gas station near Sudzha, impacting the energy market. Germany’s increased reliance on coal-fired power, coupled with higher electricity prices and a drop in wind generation, further supported coal prices. Concurrently, gas prices at the TTF hub spiked by 10%, reaching $436.27 per 1,000 cubic meters, marking a record high since December 2023.

In South Africa, High-CV 6,000coal prices held steady at $115-116 per tonne, bolstered by strong Europeandemand and robust interest from India. However, logistical disruptions,including a delayed 10-day maintenance by Transnet due to cable theft, contributedto a decline in inventories at the Richards Bay Coal Terminal (RBCT), whichdropped from 3.6 million tonnes to 3.3 million tonnes. Transnet also revisedits rail coal shipment forecast down by 10% to 54 million tonnes for the fiscalyear, citing ongoing challenges with cable theft and railcar derailments.

China saw a slight decline inspot prices for 5,500 NAR coal at Qinhuangdao port, adjusting to $119.5 pertonne as demand is expected to soften. Many coal suppliers anticipate a marketslowdown in mid-August due to a likely reduction in consumption as the heatwaveeases. Inventories at major coastal thermal power plants and ports showed mixedtrends, with a small decrease at power plants and a slight increase at ports.

Indonesian 5,900 GAR coalremained relatively unchanged at $90.7 per tonne, as limited supply due toadverse weather conditions kept prices stable. However, some industry playersexpect the supply situation to improve, particularly in East Kalimantan, withpotential increases in Chinese imports in late September ahead of winter.

Australian High-CV 6,000 coalprices rose above $146 per tonne, supported by sustained demand in theAsia-Pacific region and reduced Colombian supply due to heavy rains.Additionally, declining Russian coal exports, driven by infrastructure issuesand high production costs, further pushed prices upward.

Source: The Coal Hub