Thermal coal markets short-term outlook January 2022 Report

Commodity Market Report 29 January 2022

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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

Seaborne thermal coal markets were short coal again this month with the announcement of Indonesian’s coal export ban for January. The Indonesian government ordered the ban on exports 1 January, as the utility PLN reported critical levels of coal stockpiles. The government required producers to replenish utility inventories by 20 days of supply. With high international prices for coal, Indonesian producers had likely been putting off domestic market obligations in favour of higher profits on the export market. The ban sent the markets into turmoil as thermal exports from Indonesia represent around 45% of total seaborne exports. As the ban lifts in February, global coal prices should ease. However, the seaborne thermal market will still need to make up for the loss of Indonesian tonnage and then some, as other supply regions have yet to recover fully post pandemic.

China – China imported 246 Mt of seaborne thermal coal in 2021
India – imports revive on stockpile replenishment and strong industrial demand
South Korea – new annual cap
Europe – supply disruptions could hinder coal generation
Australia – better performance expected in 2022 as La Niña subsides
Indonesia – export’s ban eased, however restriction likely to weigh on production
Russia – new eastbound quotas could boost thermal coal exports
South Africa – coal exports plunge to 1996 low
General discussion and base case
High/low scenarios

Tables and charts

This report includes the following images and tables:

China’s seaborne imports and the QHD prices
European coal imports by supply country
Australia thermal coal exports

Rainfall at key mines (ranked by total rainfall over Nov21 to 19 Jan22)
Indonesia coal production and exports (Mt)
Indonesian mines 7 day average rainfall (mm/week)
Indonesia coal producers budget plan for 2022
SA total coal exports by port
SA Monthly thermal coal exports
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)