Europe is the savior of coal: Demand Rising, Prices Soaring

World coal prices strengthened after European coal imports surprisingly surged amid the rapid growth of new renewable energy (EBT).

Based on Barchart, world coal prices on Thursday (30/1/2025) were recorded at US$116.9 per ton, 0.73% higher than the previous position.

Total European thermal coal imports in Q4 2024 rose to 8.5 million metric tons from 5.2 million metric tons in the previous quarter, according to S&P Global Commodities at Sea data. The previous quarterly record was 10.8 million metric tons in Q1 2023, according to CAS data.

The increase in imports was driven by rising demand from the utility sector due to gas price volatility, coupled with weaker wind power production and lower-than-expected temperatures, increasing coal burn rates as profit margins for power producers become more attractive, according to market participants.

This increase in demand was reflected in higher prices, with the CIF ARA 6,000 kcal/kg NAR coal price assessed by Platts averaging $117.15/mt compared to $113.45/mt in the previous quarter. However, the Q4 average price was still lower than the $125.65/mt from a year earlier, indicating the overall weakness of thermal coal usage in Europe.

On the other hand, wind power production in the EU remained stagnant at 477 TWh, despite encouragement from governments to add new capacity. Less favorable wind conditions weighed on output, according to a report from Ember, a London-based think tank, on January 23.

Overall, the EU has avoided importing 92 billion MMBtu of gas and about 55 million metric tons of hard coal in the power sector since late 2019, according to the report.

“A new wave of coal plant closures is on the horizon: Another 11 EU countries have announced plans to completely phase out coal from their electricity mix in the next five years. This means only seven countries will still be using coal by 2030, with at least 34 GW of the 101 GW of coal generation capacity still in operation set to close by that year,” the report said.

Source : https://www.cnbcindonesia.com/research/20250131055819-128-606848/eropa-penyelamat-batu-bara-permintaan-meningkat-harganya-melonjak