US Non-Coking Coal: Prices stall amid bleak market outlook

The U.S. thermal coal market has been seeing very little price variations during the past week, due to the sustained lack of spot activity amid an oversupply situation in the European market.

Notwithstanding earlier expectations of increased coal burn with the onset of a sweltering European summer—physical coal prices in the broader Atlantic Basin continued to remain overly bearish on account of elevated stockpiles in the Amsterdam-Rotterdam-Antwerp (ARA) complex.

Meanwhile, slumping prices for liquefied natural gas, a cleaner energy source, has enabled coal-based power producers to prioritize gas as a primary fuel source.

Furthermore, persistent weakness in global seaborne coal markets is keeping the near-term outlook negative.

In Asia, Japanese buyers have locked in supplies with long-term contracts, Chinese utilities are buying more local coal and generating more power from gas and water, and South Korea has raised taxes on coal imports. In Europe, too, sluggish industrial output had been curtailing power consumption, while LNG output has soared.

As global demand for the commodity softens, coalminers exporting out of the US are struggling to compete with mining giants from the traditional originating countries, viz. Australia, Indonesia and South Africa; chiefly because of logistical challenges to ship their coal to key emerging markets in Asia.

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N.B.: All prices are in USD/MT

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