S African coal holds premium to European prices

Spanish Market: Coal
14/05/24

South African API 4 coal prices flipped to a premium, compared with European API 2 equivalents, prompted by steady Asian demand offsetting dampened coal generation fundamentals in Europe.

But this firmness in South African pricing could soon push European prices higher again as buyers in northwest Europe require high-calorific value (CV) cargoes, of which South Africa is a key supplier.

The South African API 4 index stood at a 98¢/t and $1.12/t premium to the European API 2 on 9 and 10 May, respectively, Argus assessments show. South African spot prices were last at a premium to API 2 on 13 February, and following this API 2 prices rose sharply, from $92.68/t to $126.58/t by the end of March following a flurry of spot activity.

High-quality NAR 6,000 kcal/kg coal that meets the standard coal trading agreements (scota) quality is used to settle the API 2 and API 4 benchmarks. European utilities sourced much of their scota coals from Russia in previous years, but following the EU ban on Russian coal imports in 2022, South Africa emerged as a key supplier.

European spot demand has fallen in recent weeks, alongside the drop in prices, but as spot activity picks up sources believe that the API 2-API 4 spread will have to widen in order for South African coal to price into Europe.

Scota-quality coals are also available from Colombia and the US, although market sources report these origins as having less availability than South Africa. This means some of the spot trades, of which there had been four for July-arrival and one for June arrival over the past two weeks, will likely have to be met with South African-origin coal.

South Africa supported by logistics

South African prices have been supported by poor rail performance into the Richards Bay Coal Terminal (RBCT) for much of the past few years.

Railings fell on 29 April-5 May to 938,000 t/week and are set to fall further because of a planned closure of the coal line on 9-18 July. Railings fell as low as 70,000t during the days of closure in 2023.

National rail carrier Transnet's (TFR) constant underperformance has been pushing up coal prices and ultimately weighs on the cost of production and dampens demand. "Because of the TFR's performance, producers never know what they can offer and when, until the coal physically turns up," a market participant said.

Nonetheless, market participants agree that a "fairly steady demand on Indian side is keeping the API 4 propped up".

India, which is typically a price-sensitive market for imported coal, is accepting higher South African pricing because of a more bullish environment, sources said. "Steel prices moving up in India is a key factor for buyers accepting a higher [API 4] price, otherwise they would be happy buying domestic coal," a trader said.

Four NAR 6,000 kcal/kg fob cargoes of 50,000t and one of 75,000t have traded at $103-105/t fob RBCT in the past 20 days.

The net forward cost of shipping NAR 6,000 kcal/kg South African coal is higher than the cif Amsterdam-Rotterdam-Antwerp (ARA) price at prevailing physical spot and forward curve prices, suggesting there is little incentive for South African producers to target the European market. The cif ARA price would need to increase to a $16.12/t premium, compared with the fob Richards Bay price, to cover prevailing Richards Bay-Rotterdam freight costs.

Supply strains, coupled with steady Asian demand, could keep "API 4 at a small premium to API 2 for a while, but it depends on how sustained it is", a broker said.

European prices weak

European cif ARA prices have fallen in the past four weeks, from $126.19/t on 16 April to $106.31/t as of Monday. South African fob Richards Bay prices have held firm at $99-$112.30/t in the same period.

As for the weakness in API 2 prices, coal generation margins in Germany remain highly unfavourable, with the month-ahead clean dark spreads for a 40pc efficient plant at minus €28.44/MWh on 14 May, keeping gas well ahead in the fuel-switching merit order.

The average API 2 premium over API 4 for March and April was $14.29/t, before narrowing towards May and finally flipping to a premium. Exporters shipped around 138,000t of South African coal to the EU in April, down from 583,000t in April last year, data from Kpler show.

By Ashima Sharma

API 2 and API 4 prices $/t

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17/12/25

Viewpoint: Dry weather to ease Australia's coal queues

Sydney, 17 December (Argus) — Dry weather and minimal maintenance over January-March 2026 could support coal deliveries to Australia's Newcastle port, as well as exports from the thermal coal hub, which would help it recover from severe disruptions that took place during May–September. Newcastle has a 57pc chance of receiving 339–450mm of rain over the first three months of 2026, slightly above its historical median of 338.5mm but still below levels likely to cause port-side or rail disruptions, data from the Australian Bureau of Meteorology (BoM) show. The coastal city received approximately 517mm of rain during May–July this year, data from BoM show, during which Newcastle port implemented multiple rounds of vessel movement restrictions. The weather challenges pushed up the average vessel queue at the Port Waratah Coal Services (PWCS) up to 60 ships in July, from 41 vessels a year earlier. PWCS has partly cleared its ship queue since, but it still hovered at 36 vessels in November, up from just 11 vessels a year earlier. Demand in January-March Weaker demand during the first quarter of 2026 could help ease vessel congestion at Newcastle port's coal terminals. Exports to key markets in northeast Asia including Japan, China and South Korea typically decrease in the first quarter, after the peak winter season. La Nina weather conditions in Japan are expected to weaken in the second half of winter, according to the Japan Weather Association (JWA). The country faced a severe cold season in February this year, but the JWA predicts an arrival of spring-like conditions in February 2026. This could ease demand for coal exports to Japan during that period. But weaker demand could put pressure on coal producers if prices fall steeply next year. Newcastle high-calorific value (CV) NAR 6,000 kcal/kg coal prices trended downwards from February-April after the winter season in Japan, reaching its lowest level of $91.71/t fob Newcastle at the end of April. High-CV NAR 6,000 kcal/kg coal is usually exported to Japan and Taiwan, while China mainly imports high-ash NAR 5,500 kcal/kg coal from Australia. If the premium between NAR 6,000 kcal/kg and high-ash coal tapers, producers are likely to maximise profits by selling more coal to China. Chinese utilities usually buy Australian coal to take advantage of the price arbitrage compared with domestic Chinese coal supplies delivered from north China ports. But the price of domestic coal in China was volatile from November 2024-January 2025, owing to safety inspections at major coal mines in the country. Thermal coal exports out of Australia averaged 15.4mn t/month in the first quarter of 2025, according to customs data, which is consistent with averages recorded in the first quarters of 2023-25. But this is lower than the yearly average of 16.8mn-17.3mn t/month during 2023-25. Movements to port Producers are also likely to face fewer rail disruptions over the first quarter of next year. Australian state-owned rail operator the Australian Rail Track (ARTC) has just a single maintenance shutdown planned over the period. It will close its Hunter Valley coal lines — which link New South Wales mines to the port — for 72 hours in February (see table) . ARTC conducted four rounds of major maintenance over July–November this year, pushing down deliveries to PWCS' terminals at Newcastle port. Producers sent 87mn t of coal to the terminals in January-November, down by 4.4pc on the year, data from PWCS show. By Avinash Govind and Nadhir Mokhtar ARTC track maintenance Date Lines Length of Time (hrs) 10-13 February Warabrook/Kooragang to Muswellbrook 72 10-13 February Muswellbrook to Ulan 72 10-13 February Muswellbrook to Turrawan 72 30 March-2 April Warabrook / Kooragang to Muswellbrook 48 30 March-2 April Muswellbrook to Ulan 72 30 March-2 April Muswellbrook to Turrawan 72 16–19 May Warabrook/Kooragang to Muswellbrook 72 16–19 May Muswellbrook to Ulan 72 16–19 May Muswellbrook to Turrawan 72 16–19 May Islington Junction to Port Waratah 48 16–19 May Islington Junction to Telarah 72 21-24 July Warabrook / Kooragang to Muswellbrook 72 21-24 July Muswellbrook to Ulan 72 21-24 July Muswellbrook to Turrawan 72 22-25 September Warabrook / Kooragang to Muswellbrook 72 22-25 September Muswellbrook to Ulan 72 22-25 September Muswellbrook to Turrawan 72 17-20 November Warabrook / Kooragang to Muswellbrook 72 17-20 November Muswellbrook to Ulan 72 17-20 November Muswellbrook to Turrawan 72 Source: Australian Rail Track Corportation (ARTC) Australia coal prices 2023-2025 $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia coal, Fe prices to fall; LNG up: Treasury

17/12/25

Australia coal, Fe prices to fall; LNG up: Treasury

Sydney, 17 December (Argus) — Australian iron ore, coking coal, and thermal coal prices are expected to decline by the end of December 2026, while LNG prices may rise from current levels, according to Treasury forecasts released on 17 December. Australian commodity prices are expected to return to long-run fundamental levels, Treasury said in its Mid-Year Fiscal and Economic Outlook for the 2025-26 financial year ending 30 June. Thermal Coal Australia's thermal coal prices have been supported by ex-China demand since Treasury released its July 2025-June 2026 budget on 25 March, Treasury said. But it does not expect this trend to continue. Treasury forecasts Australian thermal coal spot prices will fall to $70/t on a fob basis by the end of December 2026, down from current levels. Argus ' Australian NAR 6,000 kcal/kg fob Newcastle price was last assessed at $108.46/t on 16 December, up from $95.62/t on 25 March. Australian thermal coal exports to China fell 11pc on the year in January-October ( see table ), while shipments to Japan, South Korea, Vietnam, and Malaysia rose, data from the Australian Bureau of Statistics show. Steelmaking Inputs Chinese economic policy support has lifted iron ore and metallurgical coal prices since March, Treasury said. But it expects Australian iron ore and coking coal spot prices to fall to $60/t and $140/t fob, respectively, by the end of 2026. Argus ' metallurgical coal premium hard low-volatile fob Australia price was last assessed at $215.10/t on 16 December, while its iron ore fines 61pc Fe (ICX) fob Australia netback price was last assessed at $90.55/t. Treasury also expects mining investment to remain unchanged over the next two years, largely because of the iron ore and coking coal sectors. Iron ore producers may invest in projects to maintain production, but coking coal producers are expected to run down their capital stock, Treasury said. Producers are looking to sell or finance around six Queensland coking coal mines, a market participant told Argus on 2 December. Petroleum LNG prices have declined since March because of China's shift toward non-Australian gas, Treasury said. Australian LNG spot prices are expected to reach $10/mm Btu by the end of December 2026, according to Treasury forecasts. Argus ' Gladstone fob price — an LNG netback indicator — was last assessed at $9.01/mm Btu on 16 December, down from $12.90/mm Btu on 25 March. China plans to prioritise pipeline and domestic gas over LNG imports in the coming years, PetroChina International's global head of LNG Yaoyu Zhang said on 4 December. Treasury also expects global oil prices to hover around $66/bl over the next four years, down from its March estimate of $81/bl. Australia's government will raise less revenue from its petroleum resource rent tax than previously expected because of the downgrade, the agency added. The tax is forecast to generate A$1.5bn in 2025-26, down from the earlier estimate of A$1.95bn. By Avinash Govind Treasury Commodity Forecasts (Mid-Year Economic and Fiscal Outlook) $ Commodity Argus Price (most recent)* Forecasted Price* Change (%) Coking Coal 215.1/t 140/t -35.0 Thermal Coal 95.62/t 70/t -26.8 Iron Ore 90.55/t 60/t -33.7 LNG 9.01/mm Btu 10/mm Btu 11.0 * Argus' Australian NAR 6,000 kcal/kg fob Newcastle; metallurgical coal premium hard low-volatile fob Australia; Argus' Gladstone fob; Iron ore fines 61pc Fe (ICX) fob Australia netback * fob Australia basis, at end of December 2026 Argus, Commonwealth of Australia Australian thermal coal exports mn t Market Jan - Oct '25 Jan - Oct '24 YTD Change (%) China 53 60 -11 India 2.9 3.4 -16 Japan 59 59 0.5 South Korea 11 9.7 12 Vietnam 13 9.6 37 Malaysia 5.9 5.4 11 Australian Bureau of Statistics Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US House clears hurdle to pass permitting bill

16/12/25

US House clears hurdle to pass permitting bill

Washington, 16 December (Argus) — Republicans in the US House of Representatives have overcome an initial obstacle to passing a marquee permitting overhaul bill after committing to vote on key amendments that would strip out potential benefits for offshore wind. Republicans in the House voted 215-209 in a vote on Tuesday to approve a rule that will dictate the terms of debate for votes later this week on the SPEED Act, which has become the focus of bipartisan efforts to fast-track the permitting process for pipelines, electric transmission lines, railroads and other infrastructure. A group of far-right conservatives initially voted against the rule, but most reversed course during the vote in exchange for revisions that have yet to be made public. The Tuesday vote was one of the last remaining hurdles to House passage of the SPEED Act, which is expected to pick up some Democratic votes when it comes up for a final vote later this week. The House majority typically is responsible for putting up all the votes for a rule, meaning it would only take a few Republicans to block bill debate. Republicans were uncertain they would have enough votes for the rule, as far-right conservatives such as US representative Andy Harris (R-Maryland) and others were lobbying for changes. On Monday, US representative August Pfluger (R-Texas) urged attendees of a conference to put as "much effort as you possibly can" into persuading wavering Republicans to support the permitting bill. Pfluger is the chair of the Republican Study Commission, a caucus that represents a majority of House Republicans. "Go talk to them and let them know how important this is," Pfluger said during an event organized by the think tank the Conservative Coalition for Climate Solutions. Ahead of the vote, an industry coalition on Tuesday released a joint letter offering "strong support" for the bill. Among the signatories were the American Petroleum Institute, the US Chamber of Commerce, the Association of American Railroads and the US LNG Association. President Donald Trump has yet to take an explicit position on the SPEED Act, but administration officials are optimistic permitting legislation could be enacted. "I think we are at a time where the chance of a real permitting reform bill is higher maybe than it's ever been," US energy secretary Chris Wright said at the event on Monday. The SPEED Act would focus on the implementation of the National Environmental Policy Act (NEPA), a decades-old law that requires federal agencies to prepare environmental reviews of infrastructure projects. Pipeline companies and renewable energy developers alike blame the law for costly delays, both because of the time it takes for agencies to issue reviews and then the risks that permits will be thrown out because of lawsuits. The bill would narrow the scope of environmental reviews, aligning with a unanimous US Supreme Court ruling this summer. But the bill's most significant changes would make permits more durable. Even if a court found a NEPA review was flawed, the bill would keep permits intact during further analysis. And in a last-minute change, the bill would offer more permit "certainty" by limiting the government's ability to rescind prior approvals. That could protect pipeline permits such as the now-canceled Keystone XL pipeline, while also stopping Trump from halting more offshore wind projects. But the permit certainty language drew concern from far-right conservatives who oppose offshore wind. House Republicans in response agreed to vote on an amendment sponsored by Harris and others that would remove the "permit certainty" changes. Two other amendment votes also backed by Harris would stop expedited permitting treatment in the SPEED Act for offshore wind or any project that Trump has sought to block. Passage of those amendments could cost some Democratic support for the bill. Even if the bill passes, it is expected to be subject to major changes in the US Senate to attract enough support from Democrats to prevent a filibuster. Senate Democrats are hoping to insert language that would prevent what they describe as a "solar ban" being enforced by the Trump administration. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s energy demand falls on economic slowdown

12/12/25

Japan’s energy demand falls on economic slowdown

Osaka, 12 December (Argus) — Japan's energy consumption in the April 2024-March 2025 fiscal year fell again from a year earlier, pressured by slower industry activity. The country's 2024-25 final energy use totalled 292mn kiloliters, or 1.84bn bl of oil equivalent (boe), down by 1.7pc from a year earlier, according to preliminary data released on 12 December by the trade and industry ministry Meti. This marks the third consecutive annual decline. Coal use in final energy consumption fell by 3.7pc from a year earlier to 172mn boe in 2024-25, while oil demand declined by 3.7pc to 841mn boe. This came as energy consumption in the manufacturing and transportation sectors declined by 3.2pc to 766mn boe, and by 1.5pc to 445mn boe respectively. But demand for natural gas and city gas rose by 1.5pc from a year earlier to 167mn boe. Power demand also edged up by 1pc to 517mn boe. Coal-fired power generation edged up by 0.9pc to 283.4TWh during the period, while oil- and gas-fired power dropped by 2.7pc to 71TWh and by 2.4pc to 315.7TWh. Zero-emission power supplies, including renewables and nuclear power, rose by 3.9pc to 322.1TWh. Japan's energy-derived CO2 emissions fell by 1.4pc from a year earlier to 908mn t in 2024-25, supported by the increased use of renewable and nuclear power supplies. The 2024-25 emissions represented a 26pc fall compared with the country's 2013-14 baseline, or the lowest level since 1990-91. The lower energy consumption, as well as increased use of domestic renewable and nuclear energy, helped lift Japan's energy self-sufficiency rate to 16.4pc in 2024-25, up by 1.1 percentage points from a year earlier, based on International Energy Agency methodology. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU may crank up coal and steel research funds in 2027

11/12/25

EU may crank up coal and steel research funds in 2027

London, 11 December (Argus) — The European Commission could fund a much larger share of research in the coal and steel industry from 2027, according to a staff working document published yesterday. The EU Research Fund for Coal and Steel (RFCS) would fund 70pc of corporate research and 100pc of academic research into green initiatives if the EU moves forth with the proposal. It currently funds 50pc of both corporate and academic research projects, but has struggled to attract participants or meet its spending targets, noting that the "underspending of the project is rooted in a lack of attractiveness of certain aspects of the programme". RFCS spent 57pc of its €43mn ($50mn) budget for large coal projects and only 31pc of its €208mn budget for steel research from 2021 to 2024. Brussels, troubled by a lack of applications, consulted companies and academics this year and found that its spending requirements were the largest barrier. Most were unable or unwilling to fund 50pc of large research projects themselves. RFCS has supported a number of groups hoping to repurpose old coal mines for clean energy. GreenJOBS and Mine-TO-H2, two funding recipients, both plan on making green hydrogen from mine water, while GrEnMine received pilot funding worth €3.5mn to research new ways to store gravitational energy in abandoned mines. Others, such as REM and GI-mine, are working on new methods to capture methane from coal mines. In the steel sector, RFCS has awarded funds to hydrogen power projects such as ProSynteg and HYDREAMS and research groups such as BIOCODE, which hopes to replace up to 10pc of the coal in coke ovens with biomass. The EU dissolved the European Coal and Steel Community (ECSC) — an agency tasked with making a common European steel market, which eventually led to the creation of the EU — in 2002. The EU used revenues from ECSC assets to launch and fund the RFCS in the same year, and boosted the programme in 2021 by tapping into the assets themselves. By Austin Barnes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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S African coal holds premium to European prices

South Africa supported by logistics

European prices weak

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