June 29, 2025 - Over the past week, European thermal coal indices corrected downward to 104 USD/t after Donald Trump’s statements on the ceasefire agreement between Iran and Israel.

Meanwhile, global prices of energy commodities reached local highs on Monday after Sunday’s US strike on Iran’s nuclear facilities. Gas prices at the TTF hub were approaching 500 USD/1000 m3, the European coal index exceeded 108 USD/t at the end of the day, and the volume of paper coal contracts traded on the ICE exchange amounted to more than 4.2 mio t, the highest since the beginning of the year.

Coal stocks at ARA terminals remain at their lowest levels since March 2022: 3.17 mio t (-0.01 mio t w-o-w).

TTF hub gas prices settled at 430 USD/1000 m3 (-42 USD/1000 m3 w-o-w). European storage facilities are almost 56.9% full vs. 54.1% a week earlier.

South African High-CV 6,000 fell below 95 USD/t. Coal 5500 kcal/kg dropped to 66 USD/t.

South African rail operator Transnet transported about 23 mio t of coal to the Richards Bay terminal in the first 5 months of 2025. If the shipping dynamics continue, we can expect a result of 55.5 mio t by the end of the year (+7% vs. 51.9 mln tons in 2024).  The improved performance is the result of a decrease in the number of electric cable thefts on the railroad tracks, as well as the introduction of additional locomotives. At the same time, it was previously reported that Transnet has set a target of 63 mio t of coal transportation by the end of 2025, for which, among other things, the annual maintenance period has been shortened.

Demand for South African material in India remains under pressure as the monsoon season curbs industrial activity in the country. Also, a number of sponge iron producers have reduced capacity utilization due to falling prices for their products. Amid rising iron ore prices, this may lead to the displacement of South African coal from this segment of the Indian market. Earlier, it was reported that steel mills are forced to shift to cheaper local coal to maintain profitability.

The Zimbabwe Investment Authority (Zida) has approved a proposal by China’s Yuanlin Energy Investments to build a 600MW coal-fired thermal power plant in Matabeleland North province. The Kalungwizi power plant project will have an average project cost of 2 billion USD. The power plant will run on local coal.

In China, spot prices for 5500 NAR coal at Qinhuangdao port remained unchanged at 85-87 USD/t.

China’s domestic market enjoyed an improvement in sentiment. Hot weather has spread to many provinces, leading to increased demand for air-conditioning. In addition, prices were supported by the recent campaign of safety inspections at mines (as a result, 36 enterprises with a capacity of 96 mio t/year suspended operations).

Thus, a series of price increases of 10-20 RMB/t (1.40-2.80 USD/t) were reported in major mining regions after end-users in several non-energy sectors and a number of traders moved to increase purchases in anticipation of further price increases in the next couple of weeks.

In addition, forecasts indicate limited downside potential in both mining regions and loading ports, as many mines are operating at breakeven or unprofitable levels (according to Shaanxi Coal, approximately 33% of China’s coal mines are operating at a loss). Traders at ports of loading are also making losses at current prices.

Stocks at the 9 largest ports amounted to 28.63 mio t (-0.03 mio t w-o-w), still 1.37 mio t higher than the same time last year.

Indonesian 5900 GAR coal index fell below 73 USD/t, remaining under pressure amid weak demand from China and India.

Australian High-CV 6000 material consolidated around 110 USD/t and behaved similarly to the European and South African indices: almost hitting local highs at 113 USD/t on Monday and correcting downward.

Australia’s HCC metallurgical coal index fell below $174/t. The downward trend continues in the metallurgical coal market. Indian consumers are still waiting for an update from the government on metallurgical coke import quotas.

In addition, production activity in the country has been reduced due to monsoon. There is a sufficient amount of premium material on the market, additionally putting pressure on prices.

Meanwhile, Chinese domestic market saw a slight increase in coking coal prices (in particular, forward contracts on Dalian Commodity Exchange) amid tougher safety inspections at minis and more active consumers replenishing stocks of the material.

Australian producer Foxleigh and Japan’s Nippon Steel agreed on a benchmark for PCI coal for Q2 2025 at 146.00 USD/t FOB Australia. The benchmark for Q1 was settled at 154.50 USD/t FOB.