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Weekly Coal Index Report

15th June 2020

     

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Coal markets had a bumpy ride last week as weaker prices across the energy complex saw falls in all major coal indices. More talk of regulating Australian imports into China helped push Chinese domestic prices higher again.

China is seeking to reduce its reliance on imports as it improves its freight links for domestic miners to utilities on the coast. Oil prices fell last week although natgas, power and carbon recovered a little. Higher carbon prices make coal less attractive (via the dark spread), than natgas for European consumers, and further hasten the move away from coal.

RBCT exported 6Mt in May, which was a significant catch up after April but still leaves the terminal over 1Mt down, year on year. The decline in loadings has clearly been Covid-19-related, although with total Indian stocks (Coal India + utility stocks) at over 100Mt, and monsoon season getting underway, RBCT will be hard pressed to achieve much higher loadings in the next few months.

Higher stock levels in Pakistan and Vietnam could also weigh on SA demand going forward. Indonesia is meanwhile gearing up to target similar markets, as its own reduced domestic consumption has left its miners looking for other markets.

Edited by Creamer Media Reporter

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