Jakarta, CNBC Indonesia – Coal prices have strengthened again on Wednesday’s trade (28/6/2023). This can be seen in the July contract on the ICE Newcastle market which closed at US$ 144.5 per tonne, up 1.76%.
Since Monday (26/6/2023) coal prices have strengthened 3.58%. The increase was in three consecutive days amidst a correction in gas prices and a decrease in coal consumption.
High volatility persisted in the gas market, following news of disruptions to Norway’s gas supply following a series of unplanned outages at the LNG terminal and gas field.
Coal stocks at the ARA terminal amounted to 7.3 million tonnes (-0.13 million tonnes on a weekly basis), while reserves at the European underground gas storage facilities increased to 75% (+17% YoY).
South African High-CV 6,000 stands at US$ 100 per tonne. Pressure on coal prices was caused by the correction in the European market and limited demand, with market participants expecting confirmation that prices had bottomed out. Pakistani cement producers are showing some recovery in demand for South African materials, despite the currency crisis in the country.
In May 2023, coal shipments through Richards Bay Coal Terminal (RBCT) decreased to 4.1 million tonnes (-0.3 million tonnes or -5% on month) due to two railcar derailment incidents. In January-May 2023, exports were 19.5 million tonnes, so the total volume in CY 2023 could drop to 47.2 million t (-3.1 million tonnes or -6% in 2022), which would be the lowest point in history for more than 30 years. With maintenance scheduled for July 11-20, coal supply is expected to continue to decline next month.
In China, the spot price for 5,500 NAR at Qinhuangdao port rose by US$ 8 per tonne to US$ 114 per tonne. China’s domestic market saw a marked strengthening in prices on the back of a heatwave in several northern provinces.
China and the inspection, initiated by regulators in Shanxi province after an accident involving the deaths of three workers at a mine belonging to a state-owned Coal company on June 15, was caused by a malfunction of an underground elevator system. The safety inspection will continue from June 16 to July 19.
5,900 Indonesian GAR decreased to US$ 91.5 per tonne (-1.7 USD per tonne on week basis), due to weak demand from India and China, where supplies remained at high levels. China’s demand is also limited due to the CNY’s depreciation against the USD and economic indicator growth below expectations.
Australia’s high-CV 6,000 fell below $120 per tonne, hitting fresh lows since June 2021. Buyers are in no rush to enter into spot contracts as temperatures are expected to be moderate for much of Northeast Asia.
Australian metallurgical coal prices strengthened above US$ 230 per ton, driven by improving steel market conditions.
Prices were also supported by reports of a possible reduction in domestic supply in China, as state-owned China Coal in Shanxi province suspended operations at 6 mines with a capacity of 5.7 million tonnes of metallurgical coal per year as a result of the fatal accident for several workers.
