Newcastle thermal coal prices gained some ground as demand strengthened from Europe following the comeback of China and India.
On February 22, the March contract on the ICE closed at $199.65/t, up 1.35% from the previous day, reaching the highest in the last eight trading days since February 10. The increase extended the positive trend on top of a 9.75% rise a day ago.
The price rally is led by a rise in demand from China and India, and Europe's potential demand also fueled the trend.
Europe's predictive thermal coal imports via the Ports of Amsterdam, Rotterdam and Antwerp (ARA) in February touched 1.88 million tonnes, up from the actual imports of 1.71 million tonnes in January, Kpler's cargo-tracking data showed.
The previous price freefall – down from the all-time high of $463.75/t on September 5, 2022 to current levels of nearly $200/t – has regained interest from European countries in case that low water levels of the Rhine River, which is the major channel of coal shipments to the ports, would affect shipments again in the coming summer.
China, the world's largest coal importer, has started increasing purchases from Australia after Beijing lifted the unofficial ban imposed more than two years ago.
In the month to February 22, a total of 1.64 million tonnes of Australia coal has sailed to China, of which 1.38 million tonnes are thermal coal, Kpler data showed. This shows a big increase from only 0.36 million tonnes of coal that departed ports of Australia in January
The recent price rebound in the Chinese domestic market pushed Chinese utilities to look for more cheap cargoes in the overseas market.
In addition, India showed growing buying interest. The government asked power producers that use imported coal to run at their maximum capacity in the summer to avert similar price crunch that happened last year. To this end, utilities need to build stocks in advance. Some market sources noted "Indian buyers are willing to discuss and match Chinese buyers' prices" in terms of purchases of Indonesian and Australian coal.
(Writing by Alex Guo Editing by Tammy Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.