Commodity Market Report
Global thermal coal short-term outlook September 2019: macro slowdown intensifies
Report summary
Miners are currently doing it tough with low prices, despite the seaborne thermal coal trade set for another record at over 1 Bt in 2019. Weakening global manufacturing and trade is fast becoming the leading driver for subdued thermal coal prices, with power generation stalling across key markets. China and India's power generation has continued to slow, while growth in renewable, hydro and nuclear generation across Asia continues to take market share away from coal and gas. While European and US gas prices have rebounded off lows, we expect gas prices to remain low following the brief recovery into the European winter and continue to weigh on coal prices.
Table of contents
- Global economic jitters, surging renewables and ultra-low gas pricing hit coal demand
- China – import demand strength continues even as the economy cools
- India – coal generation stalls on economy and record hydro and renewables
- South Korea – nuclear stunts coal demand, potential winter restriction risks ahead
- Japan – Hokuriku shuts down another plant, while T yphoon Faxai cuts power availability
- Vietnam – imports expected to double to 40 Mt this year
- Philippines - import growth remains strong
- Europe - nuclear risk, gas closure and pipeline risk support coal
- Global - Miners' costs to provide support for prices
- Australia – KEPCO gets knocked back, while NSW exports outperforming Queensland
- Indonesia – looking to grow from record levels
- Colombia – the dominoes continue to fall
- Russia – more high CV coal is coming from SUEK
- United States – export risk grows once ARA protection fades
- South Africa – exports steady but exposed to slower Indian growth
- Mozambique – Vale seeks additional avenues for loss-making high ash coal
- M&A - Whitehaven seeks more met coal, while Sasol considers South African exit
Tables and charts
This report includes 4 images and tables including:
- India coal generation
- India coal imports
- Thermal coal operating cashflow margins H1 v Sep spot (estimates)
- Thermal coal operating cashflow margin estimates at September 2019 spot prices
What's included
This report contains:
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