Commodity Market Report
Global thermal coal short-term outlook April 2019: prices hit record lows
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The market panicked at the beginning of April after witnessing ARA's fall to a six-year low. Newcastle followed suit, breaking what is assumed a psychological price floor. Mild weather in traditional markets, strong renewables in Europe, nuclear restarts in north Asia, surplus of spot LNG supply and high coal inventory were all to blame – or for utilities to be thankful for, especially in Europe, as they benefited from more intense price competition between coal and gas in power generation. We revised down ARA to US$60/t on average for Q2, with gradual improvement to US$65/t and US$69/t in Q3 and Q4, respectively. The Newcastle benchmark will receive relatively better support, averaging US$86, US$88/t and US$92/t, respectively.
Table of contents
- China – weak restocking interest amid high inventory and non-coal generation growth
- India – destocking interest will improve, but domestic production adds risk to imports
- Japan – potential shutdowns of reactors could bring upside to coal
- South Korea – coal generation under pressure, but curtailment may be less severe
- Vietnam – strong imports demand with upside risk as new projects kick off
- Europe – weak generation and high stocks further subdue demand in Q2
- Australia – rail maintenance in May could keep stocks low while high-CV outlook tightens
- Indonesia – exports remain healthy despite the rains
- South Africa – force majeure may impact sentiment on exports availability
- Colombia – rainy season continues to constrain supply
Tables and charts
This report includes the following images and tables:
- China thermal coal imports by key sources
- India closing thermal coal stocks at power plants
- Deadlines and overruns of operating nuclear reactors in Japan
What's included
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