Commodity Market Report

Global thermal coal short-term outlook March 2021: supply disruptions postpone shoulder season price lull

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31 March 2021

Global thermal coal short-term outlook March 2021: supply disruptions postpone shoulder season price lull

Report summary

Supply-side issues drove the market in March, leading to a tighter seaborne balance and rising prices for high energy coal. Disruptions to Australia’s shipping infrastructure was the chief issue for the month. Heavy rains resulted in problems for the Hunter Valley’s rail network and capacity issues compounded at the Port of Newcastle. Rain issues in Kalimantan also hampered Indonesian production and South Africa has yet to resolve rail difficulties. These events caused Newcastle benchmark prices to climb 16% from the end of February to US$96/t, despite demand-side drivers that would have normally softened prices. The markets are entering the more mild-temperature shoulder season and heating demand is subsiding. A spike in ocean freight rates for panamax vessels, driven by grain into China, also deterred seaborne purchases. Additionally, falling natural gas prices in Europe are pressuring coal once again, especially as carbon prices rise.

Table of contents

  • General discussion and base case
  • High/low scenarios
  • China – rocketing ocean freight curtails China’s buying interest
  • India – coal generation growing, but power sector imports declining
  • Japan – extended closure of earthquake-hit plants weighs demand in Q2
  • Taiwan – coal phase-out pace in debate
  • Europe – coal generation challenged by natural gas yet again
  • Australia – exports slow on shiploading and rail outages
  • Indonesia – exports tick up
  • Colombia – Drummond opens a new mine
  • Russia – coal industry shaken

Tables and charts

This report includes 7 images and tables including:

  • Key prices - history and forecast (nominal, US$/t)
  • Low and high cases for Newcastle 6,000 kcal/kg at confidence intervals of 5%, 33%, 66% and 95% (US$/t)
  • Indian power vs non-power thermal coal imports
  • NCIG coal export change CY20 v CY21
  • Newcastle coal exports YTD comparison
  • Australia thermal coal exports
  • Indonesia coal production and exports

What's included

This report contains:

  • Document

    thermal-coal-markets-short-term-outlook-data-March-2021.xlsx

    XLSX 486.82 KB

  • Document

    Global thermal coal short-term outlook March 2021: supply disruptions postpone shoulder season price lull

    PDF 1.03 MB