Thermal coal markets short-term outlook May 2021 Report

Commodity Market Report 31 May 2021

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Report summary

May has proven to be one of the more volatile months this year as prices rose strongly to end the month. An already tight market saw supply disruptions in Indonesia and Colombia while coal demand rose quickly in places such as Taiwan and Europe. The continued lack of high energy supply, which is down around 7 Mt H1 2021 vs H1 2020, is making itself known as numerous countries compete for scarce spot coal.

General discussion and base case
High/low scenarios
China – high domestic prices but no relaxation of quotas yet
India – demand loses momentum amongst the second wave
Taiwan – continued power shortfalls bring upside for coal
EMEARC – coal sees a resurgence as gas and renewables stumble
Australia – struggling to regain momentum as prices surge
Indonesia – May production heavily impacted by rain
Colombia – Cerrejon suspends operations due to blockades

Tables and charts

This report includes the following images and tables:

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)
Australia thermal coal exports
Australia thermal coal trade flow change YTD comparison (Jan-Mar)
Indonesia production and exports