Coal Surges to 3-Month Peak! Edging Towards $150/Ton

Coal prices have surged for five consecutive days, reaching their highest levels in the past three months. According to Refinitiv data, the benchmark price for Newcastle coal on the ICE September contract rose by 0.27% to $147.90 per ton at the close of trading on Wednesday, August 7, 2024.

This marks a five-day streak of gains, with prices increasing by 6% overall. Yesterday's closing price is also the highest since May 2, 2024, more than three months ago.

Key Point: 

• Refinitiv data shows that the benchmark price for Newcastle coal on the ICE September contract increased by 0.27%, reaching $147.90 per ton at the close of trading on Wednesday, August 7, 2024
• This marks a 5% rise from the previous year's total of 474.42 million tons, based on data from China's National Bureau of Statistics (NBS), which set a new record

Courtesy Photo: Dominik Vanyi on Unsplash

The recent appreciation in coal prices is attributed to the increased demand outlook for coal as the year draws to a close.

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Courtesy Source: https://www.iea.org/

Citing Mining.com, a major coal industry group in China stated on Wednesday that they expect coal imports this year to reach at least 500 million metric tons, surpassing previous record highs and market forecasts.

Su Huipeng, an analyst at the Coal Transportation and Distribution Association (CCTD), said, "Coal imports in 2024 will reach this level if shipments continue to grow rapidly as they have throughout this year."

This figure represents a 5% increase from last year’s total of 474.42 million tons, according to data from China's National Bureau of Statistics (NBS), which was a record high.

Strong imports are expected to continue towards the end of the year, despite overall weak coal demand.

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Su Huipeng added that in the first six months of this year, commercial coal consumption dropped by 1.4% to 2.29 million tons.

However, domestic coal production in China remains relatively low due to safety inspections in key mining areas, limiting operations. According to NBS China, production for the January-June period was 2.27 billion tons, down 1.7% compared to the same period last year.

Additionally, recent data shows that China’s seaborne coal imports increased by 11% year-on-year (yoy) in the January-June 2024 period, while Russia's seaborne coal exports decreased by 13% compared to the same period last year. These figures highlight tightening coal supplies in the market over the past few months.

Courtesy Source: www.cnbcindonesia.com