In a week marked by significant shifts in the energy market, gas prices at the TTF hub rose to $308 per 1,000 cubic meters, reflecting a $2 increase from the previous week. This surge is attributed to reduced Norwegian gas supplies due to maintenance activities at several key fields. Despite this rise, gas storage facilities remain 60% full.
On the coal front, South Africa's high-calorific value (CV) 6,000 coal faced resistance at $100 per ton but managed to stay slightly above this threshold. Meanwhile, medium-CV 5,500 coal surpassed the $90 per ton mark, driven by higher European indices and strong demand from India and Pakistan.
Transnet’s rail coal shipments to Richards Bay Coal Terminal (RBCT) reached a weekly high of 1.2 million tons, the highest in the fiscal year 2023/2024, which ends on March 31. Additionally, 1.4 million tons were transported via the North Corridor line for both domestic and export markets, surpassing June's peak for the same fiscal year. If current shipment rates are maintained, total rail coal shipments to RBCT could hit 60 million tons in FY 2024/2025.
RBCT has lifted its ban on Optimum Coal's transshipment, enabling Liberty Coal, the mine's new owner, to resume coal exports from April. However, this is contingent on securing a definitive agreement with Transnet, which is still pending. The Optimum Coal mine, with an annual capacity of 8 million tons, previously exported 3 million tons before facing financial difficulties in 2018.
In China, spot prices for 5,500 NAR coal at Qinhuangdao port dropped by $1 to $121 per ton, influenced by reduced demand from power and industrial sectors, warmer temperatures, and high stock levels. Further pressure came from Zhujiang Investment's price cuts in Southern ports. Shenhua is also expected to lower its quotes to manage inventories.
The country's energy regulator forecasts that cumulative power generation will reach 9.96 TWh in 2024, up by 0.6 TWh from 2023, with the share of renewable energy sources set to rise from 51.9%. Inventories at the six largest coastal thermal power plants increased slightly to 13.1 million tons, while daily consumption fell to 758,000 tons from 782,000 tons. Stockpiles at the nine largest ports rose by 1.4 million tons to 23.4 million tons.
Indonesian 5,900 GAR coal prices fell by $1 to $92 per ton, driven by rising freight rates, declining Chinese domestic prices, and improved logistics in South and East Kalimantan. High inventory levels in India and China also contributed to the price drop. Market participants believe that traders are redirecting shipments initially intended for China to other markets at significant discounts due to substantial stock levels in China. The supply-demand price gap remains wide.
Australian high-CV 6,000 coal prices edged up to above $125 per ton after a benchmark price of $145 per ton FOB Newcastle 6322 kcal/kg GAR was agreed upon between Glencore and Japan's Tohoku Electric Power for the fiscal year April 1, 2024, to March 31, 2025.
Conversely, Australian hard coking coal (HCC) prices dipped below $245 per ton, reflecting an oversupply. This lower price point has attracted interest from Indonesian buyers. Additionally, some Chinese companies have reduced coke prices, indicating challenging conditions in the steel market.
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