Over the past week, European thermal coal market saw a sharp strengthening of spot quotations above 410 USD/t on the back of the recovery of gas and electricity prices to their historic highs.

Gas indices in Europe rose above 2,300 USD/1,000 m3 for the first time since March 2022 (+700 USD/1,000 m3 or +39%) after reports that the pumping capacity of Nord Stream 1 will drop from 67 mio m3 to 31 mio m3, starting from July 27, due to the shutdown of another Siemens turbine engine, which means the decline from 40% to about 19% of the maximum capacity of the pipeline. EU countries have agreed on a compromise plan proposed by the European Commission to reduce gas consumption by all member states by 15% (equivalent to 45 billion m3) from August 01, 2022 to March 31, 2023 by any available means, including increased usage of other energy sources. Therefore, the IEA expects an increase in the utilization of coal-fired power plant capacities, as well as the growth of coal burning in the EU by 7% in 2022.

South Africa

Prices for South African material consolidated around 320 USD/t on higher demand from Indian consumers and the reduction of stocks at the RBCT terminal in South Africa to 2.3 mio t (-0.5 mio t w-o-w).


In China, spot prices for 5500 NAR FOB Qinhuangdao decreased to 174 USD/t (-10 USD/t w-o-w). The Chinese domestic market shows a decline in prices, caused by increased coal production and reduced demand from the end consumers amid a drop in entrepreneur confidence index (ECI) and consumer confidence index (CCI index).


Indonesian 5900 GAR traded at 185 USD/t FOB Kalimantan. Chinese consumers remain interested in Low-CV coal from Indonesia, using it for blending with domestic or Russian High-CV material.

At the same time, Indonesian thermal coal producers are discussing downward revisions to production plans for 2022, given the shortage of mining equipment and adverse weather conditions. As a result of the limiting factors, this year's production may reach 630-640 mio t instead of the government's target of 663 mio t.


Quotes for Australian 6000 material climbed above 417 USD/t FOB Newcastle.

Japanese steel company Nippon Steel signed a contract with Glencore for the supply of thermal coal 6322 GAR from Australia for FY 2022 (until March 2023) at 375 USD/t. This price may become a benchmark for other deals in Asia. However, market participants are not confident that Nippon Steel's price can work as a benchmark for other consumers. Nippon Steel imports from Glencore 2-3 mio t of steam coal per year for its own power plants.


Australian metallurgical coal quotations continued to slide below 191 USD/t FOB Australia due to weak demand from steel producers and forecasts of global economic deterioration in 2022-2023.