Commodity Market Report

Global thermal coal short-term outlook June 2018: supply struggling to catch-up

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30 June 2018

Global thermal coal short-term outlook June 2018: supply struggling to catch-up

Report summary

Supply tightness remains entering summer. Despite a price correction after two-months of spikes, we see greater risk on the supply side amid strong seasonal demand in Asia into July. Slower-than-expected domestic supply responses from China and India, infrastructure outages and strong supply discipline in Australia, heavy rainfall in Colombia and supply shortage in South Africa etc – all sending strong signals of continued price strength in the near term.

Table of contents

    • Key market prices
    • JPU price talks between Tohoku Electric and Glencore abandoned for the April/March contract
    • China: strong summer demand likely to support imports despite RMB depreciation
      • Price arbitrage for CFR south China 5,500kcal imports
    • India: pre-monsoon restocking amid strong demand continues to support imports
    • Vietnam: new coal-fired projects bodes well for imports growth in 2018
    • Expectations of market tightening swing carbon price sentiment
    • Spain: new government proposed to phase out coal by 2025
    • UK: Drax applied to convert last two coal units to gas
    • Turkey: government imposes retaliatory tariffs on US coal imports
    • China: release of new supply expected in the second half of 2018
    • Australia: infrastructure outages and supply discipline to weigh on exports growth
    • US: miners will absorb the tariff impact or re-direct cargos amid trade tensions
    • Colombia: coal exports in May point to a recovery but uncertainties lie ahead
    • Russia: increasing exports to Europe in the near term
    • South Africa: coal export quality falling due to declining output and limited capex

Tables and charts

This report includes 7 images and tables including:

  • Key market data
  • ARA and Richards Bay 6,000 kcal price differentials to Newcastle 6,000 kcal
  • Executive summary: Table 2
  • Key prices – history and forecast (nominal, US$/t)
  • Coal demand, dispatch, and production
  • Closing coal stocks at utilities
  • Demand: Image 1

What's included

This report contains:

  • Document

    wm coal monthly thermal trade June 2018.xls

    XLS 2.83 MB

  • Document

    Global thermal coal short-term outlook June 2018: supply struggling to catch-up

    PDF 252.51 KB

  • Document

    Global thermal coal short-term outlook June 2018: supply struggling to catch-up

    ZIP 2.33 MB

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