Coal Prices (Q1 2022)
Russia continued to be a significant supplier of coal to the seaborne market, accounting for 17% and 10% of global traffic in thermal and coking coal, respectively. Buyers were unable to transact with Russian coal suppliers due to SWIFT sanctions against some Russian banks and worries about counterparty credit risks. Additionally, an increasing number of Western power utilities were considering a voluntary embargo on Russian coal supply, causing problems in the routine coal trade. As a result, on March 3, 2022, eight days after the Russia-Ukraine war began, seaborne thermal coal prices soared to an all-time high of 430 USD/MT as Western countries began imposing sanctions on Russia.
In Q1 2022, coal's share of energy generation in Germany increased to around 30%, up from little over 20% in January-March 2020 despite the fact that the country's installed coal-fired capacity has been decreased by about a fifth in the last three years. With gas prices being stubbornly high since late 2021, other Western European nations with a major coal power plant fleet, like Italy and the Netherlands, followed suit. The difference between the former and the latter was around 60 EUR/MWh.
Domestic coal consumption was expected to grow 14.2 million tons year over year, with Henry Hub spot price rising to 5.43 USD/MMBtu in 2022, up from 4.06 USD/MMBtu in 2021. The EIA projected coal consumption would reach 560.1 million short tons in 2022, up 2.6% from 2021, while electric power consumption to reach 517 million short tons, up 3.1% from 2021.
The average realized steelmaking coal price in the first quarter was 357 USD/MT, underpinned by record steelmaking coal FOB prices. The sequential increase in steelmaking coal prices from 351 USD/MT in the fourth quarter of 2021 resulted to favorable pricing adjustments of nearly USD 88 million.
Coal Prices (Q4 2021)
China had a dominant role to play in the rise of coal prices in 2021. When China refused to continue coal trade with Australia, it added to the rise in demand due to a shortage of supply. In October 2021, the price in China was the highest recorded ever at 223 USD/MT. The cost of production increased significantly due to the increased prices of steel. This was also due to the continued higher prices of gas. The Chinese government intervened to control the price rise and was able to lower it by mid-November 2021. In Europe, the price stabilised to 150 USD/MT.
In Australia, the price rose to 224.51 USD/MT in October 2021, following a decline to 157.48 USD/MT in November and then again, a price rise to 169.65 USD/MT in December 2021. In Indonesia, the price peaked at 269.50 USD/MT in October 2021 and declined to 140 USD/MT in November 2021 and rose gradually by the end of December to 170 USD/MT. In India, the price peaked at 129.27 USD/MT in November 2021, followed by a fall in prices to 123.24 USD/MT in December 2021.
Early in October 2021, the prices hit all-time highs, with imported thermal coal in Europe reaching 298 USD/MT. The Chinese government's quick policy action to balance the market had a rapid impact on prices. European prices were around 150 USD/MT as of mid-November.
In 2021, the total coal production in North America was 584 MT while consumption was 541 MT.
Coal Prices (Q1-Q3 2021)
In 2021, the average price in China almost doubled to 133.75 USD per metric ton, with the final quarter recording an average price of 166.66 USD. In the first quarter of 2021, the average price was 81.667 USD, which increased to 125 USD, 161.66 USD, and 166.66 USD in the subsequent quarters, respectively. This sudden and immense rise in coal prices could be attributed to its rising demand and not enough supply and production to keep up with it. The reduced imports from India and Australia also added to the supply constraints. Domestic production in China was also limited since most coal came from mines that were already established or had been abandoned in the past due to low prices.
China and India took pledges to reduce their emissions, which could affect their coal demand and supply. However, it seemed unlikely that these pledges would be implemented in the near future with the increase in demand to 4% in India in 2021, which was supported by the increased power generation demands from Indian households and due to the re-opening of the economy after the pandemic, raising the consumption levels to more than those in 2019. Policies were therefore implemented to prevent power outages. The price in India in the first quarter of 2021 was about 91.07 USD/MT which remained stagnant until the end of second quarter when the price dropped to 87.05 USD/MT in June 2021. Eventually there was sharp rise in the third quarter to 95.08 USD/MT in August 2021.
Production in Australia was affected by the shutting down of mines, namely Moranbah North mine, which was closed due to high gas readings. Certain other hindrances owing to bad weather, explosions at ports and immigration policies that affected large numbers of workers also slowed down production in Australia. China also reduced the import of Australian coal, which forced the country to adapt to new and challenging export routes, driving up the price. Australia, however, will still be one of the largest producers of met coal in 2021. The mean price in Australia in the 2020 was 142.58 USD/MT in 2020 with highest price of 224.51 USD/MT in October and the lowest price of 86.74 USD/MT in February.
Even Indonesia was not able to keep up with the demands of China with its exports due to bad weather conditions (such as heavy rainfall and flooding of factories) and also due to the limited availability of heavy equipment. The price of 75 USD/MT continued for the first quarter of 2021 which was followed by a steep rise in prices at the end of the second quarter at the soaring levels of 149 USD/MT. By the end of the third quarter, the prices were around 175 USD/MT.
In the United States, the demand had decreased to 20% up until the year 2020. Interestingly, in 2021 the coal power generation in US was forecasted to increase by 2021, followed by a steep decline in upcoming years. The demand in US rose by 17% (nearly 75 metric tonnes). This increase in demand was attributed to the rising prices for natural gas due to its limited supply. In 2021, US increased its exports due to the rising demand in Europe Union. The price in US raised to 230 USD/MT.
The consumption in Europe increased in 2021, as the global economy rebounded after the pandemic. The thermal coal consumption levels in Europe and US together were as much as the numbers in China in spite of Europe’s plans to abandon the use of coal to reduce emissions. In Europe, the price in 2021 was as high as 298 USD/MT.
Coal Prices Overview 2020
In 2020, the Asia-Pacific region dominated global coal production, with China alone accounting for 50% of production in the world, followed by India and Australia. The electricity supply requirements dropped due to the shutting down of factories and companies. The drop in prices was also supported by the collapse of global steel production, especially in countries like India where imports were affected due to falling steel production. Even before the pandemic, the industry was facing major setbacks due to the emergence of cheaper renewable energy sources and also due to the low prices of natural gas. Global demand was reduced by 4.4% in 2020, the highest decline in decades. However, this decline was lower than what was anticipated, the reasons for which could be attributed to a growing Chinese economy and the rise in global electricity demand.
The average price in China in the year 2020 was 71.33 USD/MT. The first quarter witnessed an average price of 76.66 USD with the highest price of 82 USD recorded in January, which gradually decreased in the following quarters to 73.33 USD in quarter 2 and 67.33 USD in quarter 3, with the lowest price of 64 USD in July 2020. However, in the final quarter of 2020, the average price increased slightly to 68 USD, which was followed by a significant increase in the upcoming year of 2021. In 2020, the demand in China plummeted owing to the global pandemic of COVID-19. China and India, along with being the largest producers of this product, are also the major consumers of it. Backed by the continual efforts of the Chinese government to increase the profits from coal, the Coal Trading Centre was set up in Beijing in 2020, and two new companies were opened with the aim of producing at least 1 billion tonnes of coal annually.
In India, the government had formed plans to increase coal efficiency through the introduction of commercial mining techniques. In November 2020, an annual capacity of 50 million tonnes was allocated. However, this amount fails to keep up with the volume of coal generated annually, which is about 800 million tonnes. The demand in India was expected to increase along with the expansion of the economy and to fuel the rising demand for electricity, steel and cement to aid infrastructural development.
Australia is also a major producer and exporter of metallurgical coal and has continued its dominance in the market. In the first half of 2020, Australia was the major exporter of coking coal to China, which decreased in the latter half due to the increased restrictions on imports by the Chinese government. Australia emerged as the second largest exporter of this product in 2020 after Indonesia. The average price in Australia in the 2020 was 60.8 USD/MT in 2020 with highest price of 83.03 USD/MT in December and the lowest price of 50.14 USD/MT in August.
The demand in Indonesia was also affected due to the pandemic. Although production dropped in 2020, the government of Indonesia planned to broaden the scope of increased production in the following year due to an increased demand for exports. The prices in Indonesia dropped from an average price of 68 USD/MT in the first quarter to approximately 53 USD in the second quarter and remained mostly stagnant till a small and gradual rise to 59 USD/MT by end of December 2020.
The global pandemic led to shutting down of factories, which in turn affected the power consumption levels and reduced the demand by as low as 20% in United States in 2020. More than 500 mines were shut down owing to the low consumption levels. The US exports also decreased due to the global drop in demand. The price in US was 46.5 USD/MT in August 2020.
The demand in Europe Union also decreased in the same manner as in US close to a 19% drop. Europe, in the past had made strong decisions to reduce the emissions from coal consumption and switched to more greener alternatives up until 2020. The average price in Europe in 2020 was about 50.28 USD.
Procurement Resource provides latest prices of Coal. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.
Procurement Resource provides prices of Coal for several regions around the globe, which are as follows:
Coal is known as a combustible black or brownish-black sedimentary rock, which is made as rock strata called coal seams. Coal is composed of mostly carbon with variable amounts of other elements, chiefly hydrogen, sulphur, oxygen, and nitrogen. Coal is made when dead plant matter is decayed into peat and gets converted into coal by the action of heat and pressure of deep burial over thousands of years. Coal serves as a primary source of energy at several industries, including iron and steel.
Coal is obtained via mining and extraction. Most coal mined is thermal coal, also known as steam coal, which is used in the electricity generation, while metallurgical coal, also known as "metcoal" or "coking coal", is used to make coke to make iron.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).