January 14, 2024 - Last week thermal coal indices on the European market dropped below 110 USD/t. Despite the cold weather and growing electricity demand in the region, quotations remain under pressure amid stable stock levels, falling gas prices, and high levels of nuclear and wind generation.

In December 2023, coal-fired generation in Germany fell 30% to historic lows for this month. At the same time, it showed a rise in early January 2024.

Gas quotes at the TTF hub slipped to 352 USD/1,000 m3 (-20 USD/1,000 m3 w-o-w), resulting from stable gas supplies.

South African High-CV 6,000 continues to trade below 100 USD/t level on limited demand in Europe.

Nevertheless, modest price support was provided over the past week with the return of buyers from India, where steel and cement production are on the rise.

South Africa’s Department of Energy and Mineral Resources published an updated long-term energy strategy (IRP 2023). As part of the new strategy, the country rejects the Western countries’ initiative to shut down coal-fired power plants as soon as possible. Thus, the lifespan of the South African energy company Eskom capacities will be extended until 2050. The strategy also calls for the introduction of technologies to capture carbon emissions.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao eased by 1 USD/t to 130 USD/t. Quotes came under pressure on the back of a forecast of 1-3? above normal temperature rise and demand restraint from industries, which cut production ahead of the Chinese New Year.

Consumption at the 6 largest coastal thermal power plants fell to 859,000 t/day (-11,000 t/day w-o-w). Meanwhile, total stocks at the 9 largest ports decreased to 24 mio t (-1.5 mio t w-o-w).

Indonesian 5,900 GAR weakened to 92 USD/t, because of low demand in the Asia-Pacific. Moreover, many Indonesian coal mining companies have agreed production volumes for 2024 with the government.

Australian High-CV 6,000 was trading above 130 USD/t. At the same time, Japanese demand was limited, following the aftermath of the 7.6 magnitude earthquake in the Hokuriku region, causing at least 1.2 GW of coal-fired generation capacity to be shut down indefinitely.

Australian HCC metallurgical coal prices rose above 335 USD/t on tight supply and higher demand from India.

Given that China may reimpose 3% duty on imported metallurgical coal from Russia, Mongolia, the US and Canada from the beginning of January 2024, China is expected to ramp up coal supplies from Australia and other countries, that concluded trade agreements on zero duties.