North America coal short-term outlook April 2017

April is a month of transition where heating and cooling demand is at its lowest level - allowing natural gas suppliers to re-build inventory and prepare for the summer. This April also follows an unseasonably warm winter making the transition to spring less striking. The mild temperatures have kept natural gas prices relatively stable but a return to more normal temperature heading into summer could cause the natural gas market could heat up and trigger a switch back to coal. Coal plant operators will be using the shoulder season to perform routine maintenance and get organised before summer demand picks up. Meanwhile, the prospect of increased summer demand will lead utilities to begin soliciting producers for new coal contracts. International markets have been volatile as two major supply shocks have tested capacity limits in the past six months. The prompt month benchmark coking coal price spiked over US$300/Mt, and US met producers are scrambling to raise output.