Thermal Coal
Prices steady as supply gradually increases
November 2017
The October spot price for premium Australian thermal coal averaged US$96/t FOB Newcastle, down 1.0% from September. The price gradually increased up to ~US$100/t at the end of October, from US$89/t at the beginning of the month.

The spot price for Newcastle high ash thermal coal averaged US$78.5/t in August, an increase of 2% on month.

Glencore and Tohoku settled the October 2017–September 2018 thermal coal contract price at US94.75/t for Newcastle 6,322kcal/kg GAR coal FOB, an increase of 11.5% from the April-March contract. The October 2016 contract price also settled at US$94.75/t.

Thermal supply in China was still tight in October as some coal mines in China were ordered to halt operations during the period of the 19th CPC National Congress. The Qinghuangdao 5500NAR thermal coal spot price averaged US$94.5/t for the month, an increase of 7.4% from September. The differential between the Newcastle high ash thermal FOB price and Qinhuangdao 5500NAR widened to average US$16/t in October. Exports from Newcastle currently have a ~US$6/t price advantage over domestic production after considering freight cost.

The spot price for CIF ARA 6000NAR thermal coal averaged US$92/t, unchanged from August. The price fell to US$90/t mid-month, then increased to US$94/t at the end of October.

South African 5,500 NAR thermal coal spot prices averaged US$75/t in October, the same price level as last month. FOB Kalimantan 4200GAR thermal coal averaged US$46/t, an increase of 2% month on month. Products sold FOB Colombia averaged US$84/t, up 1% month on month, and FOB Russia Baltic unchanged at US$86/t. Russian spot sales into the Pacific market averaged US$103/t, down 3% month on month.

The additional Chinese thermal production allowed by the central government as it eases its capacity restrictions will take another month or two to reenter the market.