Coal Prices Remain Elevated

Newcastle coal futures were trading near $350 per tonne, more than 120% above last year's level as the use of coal increased sharply since Russia's invasion of Ukraine sent prices of other fossil fuels surging and supply remains limited.

Wet weather and flooding brought to Australia by La Niña phenomenon have hit coal production for miners, including Glencore, BHP, and Anglo-American.

Australia's thermal coal exports will likely tumble by 13 ml tonnes to 183 mn this year.

Meanwhile, Indonesia's coal exports are expected to rise but remain below the government's target.

On the demand side, increasing energy security concerns in Europe, exacerbated by a ban on Russian coal, forced the reactivation of coal power plants.

At the same time, India's thermal coal imports surged 14% in the first ten months of 2022, as electricity demand increased because of a heatwave and a pickup in economic activity.