LAUNCESTON, (Australia): Seaborne thermal coal prices in Asia climbed to fresh record highs last week, with early signs of rising exports not enough to eclipse concerns over coal shortages in top importers China and India.
The benchmark price for Australian high-grade thermal coal at Newcastle Port, as assessed by commodity price reporting agency Argus, jumped to $229.11 a tonne for the week to Oct. 8, a 12.5% increase on the prior week’s close.
The index has risen by almost 160% since the week to April 30, when it ended at $88.52 and was the last week the price fell from the prior seven-day period.
The benchmark 6,000 kilocalorie per kilogram (kcal/kg) coal, most popular with Japanese and South Korean utilities, has now gained almost 400% since September last year, when it slumped to a 14-year low at the height of economic lockdowns across Asia to combat the coronavirus pandemic.
It’s not just Australian thermal coal that has surged, with lower-quality 4,200 kcal/kg Indonesian supplies actually outperforming, with the index reaching a fresh record high of $122.08 a tonne in the week to Oct. 8.
This is up 439% since the 2020 low of $22.65 a tonne, with China being the driver of the strong gains after traders and utilities switched to Indonesian cargoes after Beijing imposed an informal ban on buying from Australia amid an ongoing political dispute with Canberra.
For thermal coal, Australia used to be China’s second-biggest supplier behind Indonesia, with the most popular grade being 5,500 kcal/kg cargoes.