A bullish start to the week was followed by more subdued activity, as spot Australian prices retain their strength around $170/mt, with European prices not too far behind.
India is having to restrict coal supplies to power plants with more than 15 days stock, in order to redistribute supplies to plants with low stocks.
Lower hydropower availability amidst a spike in power demand, as well as flooding at local coal mines has caused the problem. Meanwhile, the state of Rajasthan has temporarily run out of funds to pay for coal, shutting down four thermal units due to low coal stock availability.
Recent flooding in Indonesia and Australia, with continued supply problems out of Colombia are helping to ensure spot prices remain robust, even as the forward curve strengthens into 2022.
Surging energy demand and coal’s continued average 37% share in worldwide powergen are likely to see coal prices remain higher for longer than anyone would have thought possible a year ago.
Emerging markets with less strict environmental commitments, notably Pakistan, India and Vietnam, are keeping prices robust, while China talks of carbon reductions even as it builds ever more coal plant capacity.
The spike in natural gas and crude prices to their 3-year highs is ensuring the entire energy complex remains red hot. However, EU carbon prices are also likely to keep rising towards the $70 level, putting increased pressure on the clean dark vs. spark spread.