Stories
Asian Thermal Coal Prices Hit Two-Year High Amid Tight Supplies and Winter Demand
- •Asian thermal coal prices surged to a two-year high as power plants stockpile fuel for winter amidst tightening supplies from China and Indonesia.
- •The International Energy Agency forecasts a 1.2% increase in global coal consumption to record levels following skyrocketing oil and gas prices caused by the Iran war.
- •Newcastle coal futures have risen over 40% this year, driven by Asian buyers switching from pricier gas and seeking fuel for heating.
- •Production has been constrained in key suppliers, including China following safety inspections after a deadly accident and Indonesia due to government quotas and drought.
- •India faces critical coal inventory levels at power stations after a scorching summer and the weakest monsoon since 2015 boosted electricity demand.
Key Questions Answered
Asian thermal coal prices reached a two-year high as power plants rushed to stockpile fuel for winter. This surge was driven by elevated demand, supply disruptions from China to Indonesia, and skyrocketing oil and gas prices caused by the war in Iran.
The energy crisis triggered by the war in Iran sent oil and gas prices skyrocketing, prompting Asian buyers to switch from pricier gas to coal. This increased dependence led the International Energy Agency to forecast a 1.2% rise in global coal consumption to record levels.
In China, production dropped after a deadly mining accident in May in Shanxi led to strict safety inspections and suspensions. Meanwhile, Indonesia faced government production quotas and severe drought that disrupted the barge traffic connecting mines to ports.
