- Higher gas and oil prices strengthen coal’s position
- Low Rhine levels complicate inland deliveries despite Atlantic supply
European thermal coal prices remained firm through 12 October, supported by expensive gas, low storage and geopolitical uncertainty. However, prompt coal prices showed less strength than forward contracts, suggesting that winter supply concerns are influencing the market more than a uniform increase in immediate consumption.
The distinction matters: coal can become more attractive against gas while wind generation temporarily limits its use. Meanwhile, very low Rhine water levels make delivering coal from coastal terminals to inland consumers more difficult.
Prompt prices steady; forward risk increases
North-west European 6,000 NAR coal stood at $144.80/t CIF Amsterdam-Rotterdam-Antwerp on 12 October, marginally below $145.05/t on 6 October. November bids remained around $144.75/t against offers of $147.50/t, with no confirmed transaction in the latest assessment window.
Forward prices strengthened more clearly. The 2027 contract increased by $4.70/t to $143.25/t, while November rose to $148/t.
Gas storage leaves Europe dependent on winter LNG
European underground gas storage-not LNG terminal inventory-was 72% full on 1 October. By mid-October, the aggregate had risen to around 74%, but Germany remained much lower, at approximately 60% in the 12 October data.
Europe therefore enters winter with less stored protection against cold weather and interruptions to LNG deliveries. Asian LNG prices around $26/MMBtu also indicate expensive competition for flexible cargoes.
Higher gas prices improve coal’s relative fuel economics where plants can increase output. However, carbon costs remain an important restraint: allowances rose to EUR 87.87/t, increasing the cost disadvantage of coal’s higher emissions.
Europe’s gas infrastructure can accommodate additional LNG, according to the latest winter outlook. The constraint is securing sufficient cargoes throughout the season. Under limited-LNG scenarios, storage could fall below 30% by winter’s end.
Electricity prices show how quickly weather changes coal demand
Renewable availability continues to produce sharply different operating conditions.
On 10 October, German-Luxembourg wind generation averaged approximately 33.6 GW, and day-ahead electricity prices reached zero during several midday hours. By 12 October, wind output was much weaker; the day-ahead price reached approximately EUR 291.5/MWh during the evening.
Strong wind can suppress thermal generation even when gas is expensive. Low wind, particularly after solar output falls, increases the requirement for dispatchable generation and supports coal demand.
High pressure building over northern and western Europe adds a weather variable, although its effect will depend on local wind conditions and temperatures. A cold, low-wind period would be more supportive for coal than mild, windy weather.
Rhine levels create a separate delivery problem
The Kaub gauge on the Rhine recorded only 16 cm at 5 am on 12 October, following 6 cm on 10 October. These are gauge readings, not navigable channel depths, but they confirm exceptionally low water levels.
For coal buyers, the implication is that seaborne availability and inland availability can diverge. Restricted barge loading means fewer tonnes per voyage, greater transport requirements and potentially higher delivered costs.
A stable ARA price therefore does not necessarily mean stable fuel costs at an inland German plant.
Atlantic supply remains available, with Europe drawing Colombian cargoes
Colombian thermal exports increased by approximately 20% to 1.32 mnt during 29 September-4 October.
The Netherlands received approximately 0.516 mnt, Denmark 0.079 mnt, Germany 0.069 mnt and Spain 0.060 mnt. Together, these four European destinations accounted for about 55% of shipments. Dutch arrivals may include storage and redistribution rather than immediate domestic consumption.
Colombian 6,000 NAR prices increased from $110.70/t on 2 October to $112.50/t on 9 October. US high-calorific-value coal strengthened more sharply, while South African prices also rose.
Ocean freight increased modestly: US East Coast-Rotterdam Panamax rates moved from $20.75/t to $21.25/t between 6 and 12 October. Higher oil prices add bunker-cost pressure, while diesel raises costs for mining equipment, trucking and inland transport. Actual increases depend on contracts and fuel hedging.
Geopolitics keeps supply chains divided
The Russia-Ukraine war continues to shape coal sourcing. EU restrictions exclude Russian coal, directing European buyers towards alternative origins, while Russian material remains available to markets such as Turkey.
Middle East shipping attacks create a different exposure. Disruption around Hormuz affects oil and LNG availability, insurance and shipping decisions, indirectly strengthening coal’s value as an alternative fuel. Recent attacks intensified uncertainty over energy movements through the region.
Atlantic coal deliveries to Europe generally avoid Hormuz, but remain exposed to higher global fuel costs and competition from buyers seeking alternatives to expensive gas.
BigMint assessment
Europe’s coal market is being supported by the cost and reliability of competing energy supplies, rather than an uninterrupted rise in coal consumption.
Low gas storage, expensive LNG and geopolitical risks sustain the winter premium. Wind can temporarily curb coal demand, while Rhine constraints increase the difficulty of moving available cargoes inland.
The strongest upside combination would be cold weather, weak wind and disrupted LNG deliveries. Improved maritime security, stronger gas replenishment and sustained renewable output would ease pressure. For buyers, securing dependable delivery remains as important as the headline coal price.
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