Coal
Overview
Global thermal coal prices surged to record levels in 2022, experiencing unprecedented volatility. Prices have since come off as risks associated with Europe’s supply recede. At a global level, coal demand remains robust with security of supply shifting higher up the agenda of many governments in light of geopolitical upheaval.
In Europe, sanctions have shifted the region’s coal import mix away from Russia and towards other suppliers. The pace of coal plant phase-outs in the region is set to increase in the years ahead, with the role of coal in the electricity mix shifting further towards peak-load usage, making forward planning more challenging.
In Asia-Pacific, thermal coal remains a pillar of the power and industrial sectors. Global coal trade flows and price spreads are shifting, with flows from key suppliers Russia, Indonesia, Australia, South Africa, Colombia, and the US penetrating new markets, in response to price dynamics and trade barriers.
Keeping on top of prices and flows, and how coal markets intersect with other energy and commodity benchmarks, will be critical in the coming years.
Latest coal news
Browse the latest market moving news on the global coal industry.
PJM defers 10,000MW of outages during Oct heat spell
PJM defers 10,000MW of outages during Oct heat spell
Houston, 13 October (Argus) — PJM Interconnection, operator of the US' largest grid, has asked power-plant owners to defer 10,000MW of planned outages to maintain reserve margins during this week's unseasonably warm temperatures. Generation outages are expected to total about 62,000MW on 14 October, the date for which PJM issued a maintenance outage recall. About 10,000MW of capacity was deferred to arrive at that sum, PJM said in an email to Argus . PJM forecast peak demand at roughly 111,500MW on 13 October and projected reserves would narrow to within about 900MW of required levels on 14 October even with the outage deferrals. PJM issued multiple emergency alerts covering 12-14 October, warning customers that the grid faces tight conditions. In response to the alerts, the US Department of Energy authorized PJM to temporarily suspend environmental restrictions, allowing it to implement emergency reliability measures, including asking some generators and transmission lines to remain operational or requesting some large-load consumers switch to back up generation if needed. The alerts come as PJM grapples with growing electricity demand and a shrinking window for routine maintenance, which typically occurs during North America's spring or fall seasons. Increasing baseload demand and increasingly unpredictable weather patterns are making it difficult to perform maintenance during periods that historically carried lower reliability risks. Earlier this year, the North American Electric Reliability Corporation warned that the nation's grid operators are increasingly facing reliability challenges outside of traditional peak demand periods, known as shoulder seasons. It noted that this year's March was the warmest in 132 years of recordkeeping, making the grid more vulnerable during a period when the system is not typically configured for high demand. "This is the new reality that grid operators are facing," PJM said. "Planned maintenance season will continue to present risks that we formerly faced only in summer and winter." Temperatures across much of the PJM region, which spans 13 states along the mid-Atlantic and into the Midwest and the District of Columbia, are expected to remain above seasonal norms through mid-October, boosting cooling demand. The winter heating season traditionally begins on 1 November. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
High diesel prices weigh on US coal producers
High diesel prices weigh on US coal producers
New York, 13 October (Argus) — High diesel prices stemming from the US-Iran war are increasing costs for US coal production and transportation, potentially boosting prices and curbing available supply into 2027, according to producers and buyers. Diesel is a major operating expense for surface mines, and it is also factored into rail, barge and truck fuel surcharges. Rising costs first started worrying some coal market participants when prices rose sharply in March at the outset of the US-Iran war , and that concern has only grown with the war in its eighth month with no end in sight. US retail diesel price hit an all-time high in the week ended 21 September, averaging $6.529/USG, according to US Energy Information Administration (EIA) data. While retail prices fell to $6.199/USG in the week ended 5 October, that was still $2.30/USG higher than the weekly average before the start of the US-Iran war and 53pc above values in the first weeks of October in 2021-25. Producer margins under pressure High diesel prices are having the biggest effect on Powder River basin (PRB) and Central Appalachian coal mines. Surface mines are particularly exposed because diesel fuels large-haul trucks, loaders and other mobile equipment. Producers that did not fully hedge their fuel consumption have had little protection from the sharp increase, one coal producer said. Midwest miners who had to buy fuel not under contract would have paid an average $6.286/USG in the week ended on 5 October, while those in the Rocky Mountains would have paid $6.276/USG, EIA data show. A year earlier, average prices were were $3.67/USG in the Midwest and $3.671/USG in the Rocky Mountains. "Higher production costs will drive up the floor price that producers are likely to demand," another market participant said. But many producers cannot fully offset operating cost increases in the short term, at least partly because a majority of coal currently being produced is being supplied under contracts that predate the spike in diesel prices. Operators also have limited ability to reduce diesel consumption without cutting equipment use or production. The effect may be most consequential among producers operating near break-even levels. The two largest PRB producers, Peabody Energy and Core Natural Resources, reported negative PRB cash margins in the second quarter. Peabody's PRB segment recorded a $7.1mn loss in adjusted earnings before interest, tax, depreciation and amortization, while Core Natural reported a $5.8mn adjusted loss from its PRB operations. In Central Appalachia, mining costs had already trended higher for the several years because of thinning mining seams and higher labor costs. Added cost pressures from diesel prices since March have further amplified profit-margin pressures, according to producers in the basin. Going into 2026, producers indicated that costs to produce Central Appalachian coal at a surface mine, load the product onto trucks and transport it to railroads totalled $80-$90/short ton (st). Sources say those costs have increased since the start of the war by least $6-8/st, with much of the additional expense linked directly to surging diesel prices. Elevated fuel costs may prompt some US miners to scale back output as soon as next year, a few producers told Argus. To protect their margins, US coal producers may also seek higher prices or push for adding fuel-related adjustments to contracts. Fuel adjustments are already common in Central Appalachian term agreements to account for at least some of the costs related to shifts in diesel prices, but the number of utilities willing to enter these longer-term commitments have faltered in recent years, and many rely more on purchasing coal from the basin on a spot basis. Still, buyers facing escalating rail surcharges may resist paying more for the coal itself. Sustained increases could affect the relative economics of coal-fired power generation, particularly at plants receiving coal over long rail distances or competing against natural gas generation. Transportation costs climb with lag Fuel surcharge pricing mechanisms differ by transportation company and contract. Many railroads use a monthly average diesel price from one or two months earlier, meaning that the September spike will continue flowing into freight costs even after weekly prices retreat. This could influence some coal producers' interest in exporting coal, since producers pay the cost of shipping coal to export terminals. But the greater effect on the US coal industry might be on domestic buyers. Some US power plant operators, which pay for transportation to their facilities, have not yet adjusted coal consumption and purchasing plans because of high diesel costs, but they monitor diesel prices closely. The monthly average on-highway diesel fuel price for August, which some railroads apply to fuel surcharges on contracted October coal shipments, increased to $5.462/USG from $3.744/USG a year earlier, according to EIA. This raised Union Pacific's surcharge for southern PRB coal trains shipped this month to around 70¢/mile from the 41¢/mile charge applied to shipments in October last year, equivalent to about $2.58/st increase on PRB coal shipped to the St. Louis region, according to Argus calculations. With diesel prices rising further in September, the average fuel surcharge for PRB coal shipments in November will climb to 84¢/mile. Among eastern US rail carriers, CSX's surcharge for October deliveries nearly doubled to 87¢/mile from 44¢/mile a year earlier, and the surcharge will rise further to $1.07/mile for November deliveries. By Elena Vasilyeva and Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
IMF upgrades outlook modestly despite war risks
IMF upgrades outlook modestly despite war risks
Washington, 12 October (Argus) — The global economy is holding up better than the IMF expected despite an oil supply shock triggered by the war in the Middle East, but that growth outlook could erode if the conflicts in Iran or Ukraine drag on or further escalate. The IMF's latest World Economic Outlook forecasts the global economy will grow by 3.1pc in 2026, up by 0.1 percentage point from an update in July, with some of those gains driven by an economic rebound in Europe and robust trade flows from parts of Asia. Global growth is on track to increase to 3.4pc in 2027, unchanged from the last update, IMF said. Rerouting energy commodity flows from the Mideast Gulf, releasing oil from strategic reserves and increasing oil production elsewhere has helped blunt disruptions from the closure of the strait of Hormuz. Overall, the disruptions in the strait have prompted the IMF to shave only 0.3 percentage points off anticipated global growth for 2026. If not for the cushion provided by the flexibility of oil supply and a 20pc reduction in global oil intensity over the last decade, the IMF said the war in the Middle East could have cut global growth this year by three times that. Higher oil prices contributed to China's economic growth slowing to 4.5pc this year, down from 5pc in 2025. The US economy is expected to grow by 2.3pc, bolstered by technology-related investments in data centers. Saudi Aribia's economy is projected to shrink by 3.3pc this year because of disruptions from the Middle East war, the IMF said, whereas the comparatively less diversified economies of Bahran, Iraq, Kuwait and Qatar are on track for "double digit" economic contractions. But some of the buffers that have mitigated the economic damage from war are running out, and energy markets are "highly sensitive" to any additional disruptions, such as an escalation in attacks on refineries or infrastructure. "Without shoring up supply capacity and replenishing policy buffers, the global economy could soon test the limits of resilience," IMF's chief economist Silvana Tenreyro wrote in a blog post. "Dwindling energy inventories could allow geopolitical shocks to transit even more forcefully to energy prices." Among the energy-related risks are below-average natural gas inventories in Europe that leave the continent vulnerable to extreme winter weather. Continued global depletion of energy supplies are also pushing inventories closer to "stress levels that could lead to nonlinear price adjustments", the IMF said. A prolonged stalemate or escalation in the wars in the Middle East or Ukraine could exacerbate pressure from inflation, which is on track to average 4.7pc this year, up from 4.1pc in 2025, the IMF said. The outlook anticipates global inflation in 2027 will decline to 4.1pc, although that is still 0.2 percentage points higher than the forecast from July. Global investments into artificial intelligence (AI) have been an "offsetting force" to geopolitical headwinds, the IMF said, although that growth has been concentrated in a handful of countries that produce advanced microchips, such as Taiwan and South Korea, or that are building out data centers, such as China and the US. That investment boom is contributing to near-term inflationary pressures, the IMF said, and any future re-reassessment of AI-related profitability could sharply curtail investment and tighten financial conditions. Global growth in 2027 could end up being "materially lower", and inflation "significantly higher", under a risk scenario the IMF developed under which higher commodity prices and concerns over government debt causes a reassessment of borrowing risks, Tenreyro said. Keeping publicly held debt on a "sustainable path" could prevent that scenario, she said. By Chris Knight IMF GDP growth estimates and forecasts Oct 26 WEO % ±July 26 WEO Update* Region 2025 2026 2027 2026 2027 World 3.5 3.1 3.4 0.1 0.0 US 2.3 2.3 2.3 0.0 0.1 Eurozone 1.2 1.1 1.2 0.2 0.0 UK 1.2 1.3 1.2 0.3 -0.1 China 5.0 4.5 4.0 -0.1 0.1 India 7.8 7.0 7.0 0.6 0.3 Japan 1.2 0.7 0.7 0.1 0.0 Russia 1.0 0.9 0.9 -0.2 -0.2 LatAm-Caribbs 2.5 2.3 2.3 -0.1 -0.2 Middle East-central Asia† 3.7 -0.3 6.3 -1.0 -0.2 *percentage point changes †Middle East, north Africa, Afghanistan, Pakistan, central Asia Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
S Korea’s utilities merger to reshape coal procurement
S Korea’s utilities merger to reshape coal procurement
London, 12 October (Argus) — South Korea's planned merger of its five state-owned utilities is set to reshape its thermal coal procurement, paving the way for centralised purchasing, harmonised coal specifications and more flexible shipping operations, a Korean power sector official told Argus . The five utilities are scheduled to merge on 1 October 2027 into a single entity, provisionally named Korea Power Generation, with a combined generating capacity of 53GW. Together, they account for about 83pc of South Korea's thermal coal demand and 89pc of its coal burn this year, according to Argus calculations. A centralised coal procurement team could be established ahead of the merger to allow time to test the new purchasing system, although no firm decisions have been made on the timeline, the official told Argus . The five generators currently procure coal independently, with price competitiveness a key priority as they compete with one another. But the merger could shift the focus towards supply security, as the combined entity would be responsible for coal supplies across all five generators' coal-fired plants. Centralised procurement could also give the merged entity greater bargaining power through economics of scale, although some market participants have previously questioned whether larger purchasing volumes would necessarily translate into lower procurement costs. The five utilities currently have different coal purchasing specifications, even for plants with similar boiler designs, sources familiar with the matter told Argus . The merger could help streamline these requirements where technically feasible, they added. The merged entity is expected to take over existing coal supply and long-term consecutive voyage charter contracts, sources told Argus . Greater flexibility in operations The five utilities currently use 46 long-term chartered vessels combined, the official said. These vessels primarily serve their respective utilities' power plants, but the merger could bring them under a single fleet, enabling last-minute optimisation of cargo allocation, shipping schedules and discharge ports based on individual plants' needs, the official added. Greater flexibility in coal allocation could help the utilities manage inventories more efficiently, reducing the need for emergency purchases, according to sources. The merger could also make it easier to transfer coal between coal-fired plants to address logistical disruptions or shortages. Such arrangements have been time-consuming under the current system, because of competing interests among utilities, market participants said. Preparations for the merger are under way, with some beginning to exchange information on plant specifications and long-term vessel charters, the official said. Strong leadership will be crucial to integrating the five utilities' operations, while the merged entity will need to balance fair representation from each company with the experience and expertise required to maximise the benefits of the merger, sources said. Meanwhile, the South Korean government launched a merger preparatory committee on 30 September to oversee preparations for the planned merger of its state-owned utilities, according to climate and energy ministry Mcee. "The goal is not simply to create a larger power company but a stronger energy company that can ensure a stable and efficient power supply while advancing carbon neutrality and energy security," Mcee said. By Dayu Park HQ location of S Korea's state-owned utilities South Korea's coal-fired plants Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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