The G7 nations have come out with a call to end all forms of coal finance. This was clearly a move to pressure China, who is not in the block. It does of course also ramp up pressure internationally on both public and private financiers.
However, as our latest research reveals, this could prove exceptionally bullish for coal prices going into 2025-2030, if coal production shuts down faster than coal-fired generation.
We are expecting quite a dramatic coal supply cliff, notably for Eskom, during this period.
India has now taken almost 10-million tonnes year-to-date from each of South Africa and Australia, who have come from nowhere to capture this market share. It is even cheaper now
to ship Australian coal to Dubai, than from RBCT.
As South Africa’s largest export market, this loss of Indian tonnage should be a massive warning to SA coal producers, considering the uncertainty of Chinese demand and the vagaries of China’s Inspection & Quarantine Agency (CIQ).
However, the FOB spread (RBCT vs. NEWC) is narrowing once again while Chinese domestic thermal coal prices fall further as the tightness in coal supply starts to ease. European power, gas, crude and emissions prices are all softer too, although volatility is increasing.
News from the States is that molten carbonate fuel cells, that use waste CO2 from fossil fuel power plants, may be showing promise as a useful means of powergen as well as carbon, capture and storage.