Commodity Market Report
Thermal coal markets short-term outlook February 2022
Report summary
The Russia-Ukraine tension looms to a boiling point that has rattled global commodity markets. Gas and oil prices rallied further amid the Russia/Ukraine situation. ARA delivered coal prices surpassed US$250/t again as European coal stocks plunge, adding strength to Newcastle benchmark prices. As the Ukraine conflict develops, traders are vigilant about further complications and price, in potential risk of broader sanctions on Russia's gas, oil, and coal exports. Anything impossible could be possible in extreme times like this, but normal import activities remain the most likely outcome. Europe’s heavy reliance on Russian gas and coal imports in the current tight market means a prolonged cut-off of gas or coal inflows would bring damage to both EU and Russia, triggering a global recession. Finding the scale of alterative supply that could replace European imports from Russia through 2022 would be a moon-shot already, let alone the economic consequences.
Table of contents
- General discussion and base case
- High/low scenarios
- China – negative price arbitrage curtailed China’s demand for seaborne products
- India – high seaborne coal prices keeping importers at bay
- EMEARC – supply tightness to keep prices elevated
- Global – high CV supply could increase by 7-22 Mt in 2022
- Australia – rainfall and rail maintenance restricts February exports to 9-year lows
- Indonesia – wet weather and export ban dragging down output
- Russia – rail woes continue as producers brace for impacts from the Ukraine conflict
- South Africa – h igh rainfall adds to rail problems
- Colombia – looming election slows movement on reopening coal mines
Tables and charts
This report includes 12 images and tables including:
- Risk scale of Russian thermal coal export by importers (based on 2021 actual trades)
- Key prices - history and forecast (nominal US$/t)
- Low and high cases for Newcastle 6,000 kcal/kg at confidence intervals of 5%, 33%, 66% and 95% (US$/t)
- European coal imports by supply country
- Global high CV supply
- Outlook for global high CV thermal coal exports
- Australia thermal coal exports
- Outlook for Australia high CV thermal coal exports
- Indonesia coal production and exports (Mt)
- Indonesian mines 7-day average rainfall (mm/week)
- Average rainfall across SA coal mines
- Worst impacted SA export coal mines (1 Jan to 23 Feb)
What's included
This report contains:
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