Coal markets

May 2016

Coal prices have recovered by as much as 4% in May versus April, matching modest gains seen in gas contracts around the world and driven partly by a stronger crude oil market.

Asia Pacific

  • Richards Bay, South Africa coal prices strengthened, with the ICE front-month contract rising by 1% so far in May from the April average, to around $53.45/t. Physical cargoes have also gained, by around 3%. Futures prices are currently 6.7% higher than at the start of the year. Richards Bay is South Africa’s main coal export point. It exported 75.4 mt in 2015, marking a 5.6% increase over the 71.2 mt it exported in 2014. Exports for 2016 are expected to be around 75 mt.
  • Coal prices in Newcastle, Australia have made only marginal gains so far in May. The front-month ICE contract rose to average $50.60/t in the first half of May after dipping in April. The market has flattened out from the backwardated forward curve that prevailed in April, and is now showing a shallow contango until May next year, with backwardation after that.

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