Summer 2023: Global thermal coal supplies target Pacific Basin demand as Atlantic Basin appears well stocked

S&P Global Commodity Insights has updated its International Thermal Coal Market Forecast, May 5, 2023. In Asia, the recent heat wave and restocking efforts for summer power demand is supporting Pacific Basin thermal coal prices. Although prices remain low in the Asian spot market, demand is slowly beginning to appear among buyers in China and India and smaller spot buyers.

Global thermal coal prices remain under pressure and have moderated to end 2021 levels prior to the Russia-Ukraine war. The decline in global spot thermal coal prices is boosting the ability of smaller, more predominantly spot thermal coal buyers in Asia to increase coal generation to meet near-term demand (versus the limits of 2022 due to prices).

Renewables growth and demand weakness in Europe leading to strong coal and gas stockpile situation is limiting price support through S-23 in the Atlantic Basin. With the emergence of distressed cargos during Q1 and price arbitrage opportunities, we expect continued high-CV seaborne thermal coal cargoes being diverted back to Asia ahead of summer demand.

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Wendy Schallom is a senior analyst for coal and power markets for S&P Global Commodity Insights.

Posted on 16 May 2023

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.