September 2, 2025 - The coal market was predominantly bearish: indices in Europe decisively broke below the 100 USD/t mark, reaching 3-month lows; the pace of price gains in China slowed down; in Australia, High-CV and Medium-CV material saw modest gains, while metallurgical coal quotes continued to correct downward.

Over the past week, European thermal coal indices saw a sharp drop. Prices settled below 93?USD/t, marking a three-month low amid rising coal stocks at ARA terminals, milder weather and an increase in renewable generation, which exceeded expectations and covered a substantial part of demand. Furthermore, power companies report adequate coal inventories for Q4.

Gas quotations on the TTF hub dropped to 381.3 USD/1,000 m³ (-16.61 USD/1,000 m³ w-o-w). Storage facilities are 76.6% full (+2 p.p. w-o-w). Injection rates are exceeding 2024 levels. Coal stocks at ARA terminals climbed to 3.51 mio t (+0.17 mio t or +5% w-o-w), which is attributed to more active supply and slower consumption, even though navigation conditions on the Rhine improved.

The South African High-CV 6,000 plunged back to 84-85 USD/t amid falling prices in Europe and rising supply. Quotes hit new 4-month lows. High freight rates also constrained importers’ activity. However, Medium-CV coal firmed as some buyers began inquiring for September deliveries, anticipating a demand recovery after the monsoon season in India.

Last week, Exxaro reported an increase in exports for H1 2025 to 3.4 mio t (+0.1 mio t y-o-y), while Thungela Resources stated that further supply cuts might be required to balance the market if low prices persist for an extended period.

South Africa’s Ministry of Transport has shortlisted candidates from private operators to work on key rail lines, aiming to double raw material exports by 2030. Out of 25 applicants, 11 private operating companies were selected to proceed to the next round of negotiations for access to the country’s main network. The companies’ names were not disclosed.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao advanced to 99 USD/t, continuing to firm owing to tightening inventories and production cuts, caused by heavy rains and administrative government measures to combat overproduction.

Rain and flooding in Inner Mongolia and Shaanxi led to the closure of dozens of mines and output cuts. In the city of Dongsheng on ?August 27, operations were suspended at 26?mines with total capacity of 90?mio?t per year.

In the central and eastern regions of the country, temperatures are expected to start falling on??September 01, which will curb demand for air conditioning.

Inventories at the 9 largest ports decreased to a new annual low of 23.08 mio t (-0.36 mio t w-o-w), while coal stocks at the 6 largest coastal TPPs totaled 13.49 mio t (-0.10 mio t w-o-w). Daily consumption rose to 941 kt/day (+29 kt/day w-o-w). Thus, coal stocks at coastal TPPs are sufficient for approximately 15 days of operation, which is neither critically low nor excessive enough to pressure the market.

Indonesian 5,900 GAR gained 1 USD/t to 75 USD/t, while the price of 4,200 GAR remained at last week’s level of 43 USD/t, supported by rising prices and demand in China and other countries in the Asia-Pacific.

Indonesian coal quotations are holding their ground. Demand from China and India is limited, but it is being compensated for by Vietnam, the Philippines, and occasional purchases in Northeast Asia. Furthermore, traders and producers are reluctant to offer discounts, preferring to hold back material rather than sell at lower prices.

Australian High-CV 6,000 continued to trade within the 109-110 USD/t range, while Medium-CV 5,500 also remained stable at 71-72 USD/t. The resilience of Australian thermal coal quotations is underpinned by restrained supply, vessel queues at ports, and support from Asian buyers, including South Korea and Japan. Maintenance and replacement of shiploaders at the Kooragang and DBCT terminals are also limiting loading rates.

Australia’s HCC metallurgical coal index continued downward correction to 186 USD/t because of growing supply. Market participants say the demand for new parcels is limited. The secondary market is seeing resales of material and the postponement of previously agreed shipments.

Further pressure stems from declines in paper contracts on the Chinese and Singapore exchanges along with lower quotes from Canadian suppliers. Furthermore, proposed increases in coke prices remain unresolved in China, which undermines buyers’ confidence.