As coal prices soared to new levels, Rory simington, chief analyst at wood Mackenzie, an energy consultancy, said it would be difficult for coal importers to take a tough stance on Russian coal due to global market tensions.
According to ICE Futures Europe, the futures price of high-quality thermal coal loaded at the port of Newcastle, Australia, as the benchmark coal price in Asia, rose to $446 / ton on March 2, up $140.55 a day, or 46%, the highest level since 2008. On February 25, the closing quotation was only $238 / ton, up 87% in three trading days.
After the soaring price of Australian thermal coal futures, the shares of several local coal producers also rose sharply. As of the closing on March 3, Yanmei Australia (03668. HK) rose 1.26% after rising more than 50% in the previous trading day, and rose more than 80% in the week. Its share price hit a record high; Whitehaven’s share price rose more than 10% during the day, the highest level since 2019 Shares of New Hope Liuhe Co.Ltd(000876) (new hope Corp) and BHP Billiton (BHP) also generally rose.
Affected by the situation in Russia and Ukraine, the global commodity market fluctuated violently. Out of concern about the interruption of coal supply in Russia, the global coal price rose sharply.
Russia is not only a large country with global coal reserves, but also the third largest exporter of coal in the world. Data show that Russia’s recoverable coal reserves reach 157.01 billion tons, accounting for about 17.2% of the world’s recoverable reserves, ranking second in the world.
Deputy Minister of energy Peter bobelev said that Russia’s coal exports reached 220 million tons in 2021. China, Japan, South Korea and European countries are the main exporters of Russian coal.
“Russian coal accounts for about 30% of Europe’s metallurgical coal imports and more than 60% of Europe’s thermal coal imports. The main problem for Europe to replace Russia’s coal exports is its dependence on the quality of Russian specific coal”. Rory simington explained that the coal imported from Europe, Japan and South Korea is mainly high-energy thermal coal and PCI (injection coal), At present, the power plants using this kind of coal are specially designed to operate high-energy coal and cannot convert coal type. Steel plant operators will face the challenge of replacing PCI in Russia, which can not be imagined to be replaced in the current tight global supply market.
