Coal Eases from 3-Month High

Thermal coal futures exported from Australia dropped to $145 per tonne, marking a decline from their three-month peak of $149 on September 7th. This decrease was attributed to increased output from China, which partially countered the surge in demand. The Chinese central government bodies issued a joint notice encouraging local miners to sustain high production levels following a surge in local prices to multi-year highs.

Domestic thermal coal production had already declined since May, following an accident in the Shanxi province that triggered numerous safety inspections. This period of reduced production aligned with robust demand from key consumers of Australian coal grades, namely Japan and South Korea. The escalating prices of LNG had prompted utilities to expand their coal power plant capacities.

Moreover, the supply of LNG had remained at recent peak levels due to the cessation of tanker shipments from Gulf Cooperation Council countries following the ongoing Middle East conflict. The Energy Information Administration (EIA) consistently revised its forecasts to account for a projected 1.2% surge in coal demand for the current year.