Commodity Market Report

Thermal coal markets short-term outlook March 2022

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31 March 2022

Thermal coal markets short-term outlook March 2022

Report summary

Three key issues will drive coal markets over the short term. How the Ukraine-Russia conflict will impact coal supply and demand, whether China will be able to offset the economic impact from what is becoming the largest coronavirus outbreak since the start of the pandemic, and more broadly the risk posed by higher interest rates to global economic growth. On the conflict, what will happen to Russia’s coal exports this year, and who stands to benefit? What’s increasingly certain is that we are going to see yet another material change in global trade flows, after China’s unofficial ban on Australian coal in 2020 reshaped the market. The disruption will add another layer of inefficiency in the market keeping coal prices elevated.

Table of contents

  • General discussion and base case
  • High/low scenarios
  • China – imports halve in February owing to Indonesia’s export ban
  • India – domestic coal supply needs further acceleration to support demand growth
  • Europe – coal demand to remain strong as uncertainty over gas supply intensifies
  • Japan – earthquake and fuel switching incentives add downside risk to Q2 coal demand
  • Vietnam – covid-disrupted mine output provides headroom for expensive imports
  • Indonesia – exports to bounce back strongly
  • Russia – producers facing extreme uncertainty
  • South Africa – export outlook improves with higher expected railings and better weather
  • Colombia – Prodeco reopening targeted for later in 2022

Tables and charts

This report includes 12 images and tables including:

  • 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)
  • Japan’s coal-fired power capacity outage
  • South Korea coal to gas switching economics
  • Japan coal to gas switching economics
  • Australia thermal coal exports
  • Australia thermal coal tradeflow
  • Indonesia coal production and exports (Mt)
  • Indonesian mines 7-day average rainfall (mm/week)
  • RBCT coal exports and TFR railings
  • Average rainfall across SA coal mines
  • Worst impacted SA export coal mines (1 Oct to 23 Mar)

What's included

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    Thermal coal markets short-term outlook March 2022

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