Commodity Market Report
Global thermal coal short-term outlook May 2020: lockdowns are ending, is there a recovery in sight?
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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
Lockdowns around the globe ended in May and the results were immediate. Power demand improved throughout the month for every major country for which we track. The difference between the first and second half of the months could not be starker. Newcastle 6,000 prices fell below the US$50/t mark early in the month as demand bottomed out, a price not seen since 2016. However, in the last two weeks the extraordinary increase in Chinese thermal coal burn signalled a small, but meaningful rally for coal. Major benchmark prices finished the month up 7-17% from their lows and Newcastle 6,000 returned above US$50/t. A turn-around in the global economy may be emerging but it is not out of the woods yet. We expect global GDP to contract 4% this year – the worse recession since the Great Depression. Stimulus packages being launched will only serve to soften the recession, not prevent it. All of this means another few months of weak pricing and demand.
Table of contents
- General discussion and base case
-
Low case coronavirus scenarios
- Conditions which could induce lower prices:
- China
- India
- South Korea and Japan
- Europe
- North Africa
- Colombia
- Australia
- Indonesia
- South Africa
- Russia
Tables and charts
This report includes the following images and tables:
- Key prices - history and forecast (nominal US$/t)
- China seaborne thermal imports and price arbitrage between QHD and Newcastle 5,500 HA (as of 22 May)
- Daily coal consumption of the six largest gencos in the coastal region (as of 22 May 2020)
- India daily power demand (as of 25 May)
- Japan power demand (weekly)
- South Korea power demand (monthly*)
- Coronavirus low case for Newcastle 6,000 kcal/kg at confidence intervals of 33% and 5% (US$/t)
What's included
This report contains:
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