Commodity Market Report
Global thermal coal short-term outlook April 2019: prices hit record lows
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 3 images and tables including:
- 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
This report contains:
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