The European market saw thermal coal quotations rise above 350 USD/t last week amid an upcoming embargo on Russian coal as well as fears of outages at French nuclear power plants, caused by the required maintenance. Civil protests in Colombia led to the suspension of rail shipments of coal from Cerrejon (Glencore) deposits to the port of Bolivar, that was an additional factor supporting coal prices in Europe. Coal stocks at ARA terminals increased to 5.9 mio t (+0.3 mio t or +7% w-o-w), which is the highest level since November 2020.
Increased demand for South African material from EU countries, seeking to replace Russian coal supplies, continues to push South African indices above 355 USD/t. Exporters are building coal stockpiles at Richards Bay Coal Terminal (RBCT) ahead of maintenance work scheduled for July 12-21 on the railway line between South African coal-producing provinces and RBCT. Coal stocks at Richards Bay amounted to 3.4 mio t (+1.4 mio t y-o-y).
In China, spot prices for 5500 added 3 USD/t to 184 USD/t FOB Qinhuangdao. Low coal reserves in Chinese ports and power plants, strengthened thermal coal quotations in the Chinese domestic market. As of May 16, 2022, inventories at Bohai Bay ports decreased to 12.6 mio t (-17.4% y-o-y), including coal stocks at Qinhuangdao port, totaling 4.7 mio t (-6.2% y-o-y).
The increase in Australian quotes above 430 USD/t was driven by strong demand from Japan and South Korea, striving to substitute coal imports of Russian coal. The ongoing FY benchmark negotiations between Australia and Japan, as well as heavy rains in Australia, hampering production ramp-up, also had a positive impact on coal prices from Australia.
Indonesian 5900 GAR climbed to 200 USD/t FOB Kalimantan. High trading activity by Indian generators, who are restocking, following record high average daily temperatures, continues to support priced for Indonesian material.
A tight supply of metallurgical coal on the global market, along with strong demand from Asian steelmakers, strengthened Australian metallurgical indices to 530 USD/t.
Source: CAA: Coal Center International