Fob prices for US exports of thermal coal (loaded at major ports on the East Coast) have remained largely unmoved over the last couple of weeks, as a confluence of bearish factors continued to weigh heavily on demand from major export market – Europe.
Low European-delivered thermal coal prices have made it increasingly difficult for the U.S. producers to generate viable profit margins relative to domestic opportunities.
Thermal coal prices in Europe have experienced a significant downturn since the start of 2019, following an unseasonably warm weather and a glut of liquefied natural gas shipments from Asia hurting gas prices and eventually demand for coal.
The combination of cheap natural gas prices and an added benefit from government subsidies have provided lucrative opportunities for coal-to-gas switching in most EU nations.
Further, as European power utility companies come under increased governmental pressure to reduce carbon emissions, several existing coal-fired power plants have already been repurposed to run using less-polluting fuels such as biomass and natural gas, while many others are seeking permit changes for conversion.
PRICE ASSESSMENTS
| Week No./
Assessment Date(s) |
FOB Baltimore
6,000 NAR |
FOB Hampton Roads
6,000 NAR |
FOB New Orleans
6,000 NAR |
| Week 38 (16th Sep – 20th Sep) | 48.48 | 64.50 | 40.25 |
| Week 39 (23rd Sep – 27th Sep) | 48.87 | 63.50 | 41.35 |
| Change (%) | 0.80 | -1.55 | 2.73 |
N.B.:
1. All prices are in USD/MT
2. Weekly price is derived by averaging daily prices of every official business day; between and including Monday through Friday
Logistics
| Load Port | Unload Port | Vessel Class | Cargo Intake (MT) | Freight Rate (USD/MT) |
| Baltimore, Maryland, USA | Mundra , Gujarat, India | Capesize | 149,000 | 27.28 |
| New Orleans, Louisiana, USA | Mundra , Gujarat, India | Panamax | 65,000 | 38.01 |
| New Orleans, Louisiana, USA | Dhamra , Odisha, India | Panamax | 65,000 | 36.51 |
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