Coal Celebrates Five Consecutive Days, Price Breaks 3-Week High

Coal prices continue to surge, supported by rising demand. According to Refinitiv, coal prices closed at US$134.1 per tonne, soaring 3%. This increase extends the positive trend in coal prices, strengthening for five consecutive days by 11.4%. Asian coal demand is heating up again. The two largest global coal consumers, India and China, are both showing strong signals of coal-based energy consumption amid extreme hot weather and a surge in electricity needs. This situation has the potential to be good news for Indonesian coal exporters. In India, coal- and gas-fired power generation jumped last week after peak electricity demand broke the record at 256.1 gigawatts (GW) on 25 April. This figure surpassed the previous day’s record of 252.08 GW. To meet the surge in electricity needs due to the heatwave, India operated around 9.6 GW of gas-fired plants and increased coal-fired power plant (PLTU) electricity production to 187 GW. NTPC Limited, India’s largest thermal power producer, is reportedly purchasing additional gas through the domestic gas exchange and operating plants in line with instructions from the national grid operator. India estimates that this year’s peak electricity demand could reach 270 GW. To ensure supply, the country is also delaying maintenance on nearly 10,000 MW of PLTU capacity until July. Meanwhile, in China, the thermal coal market remains solid even though maintenance on the main Daqin Railway logistics line has been completed. This line is the lifeline for transporting coal from mines to northern China’s major ports. Usually, the end of maintenance would increase supply and pressure prices. However, this time the market remains optimistic because summer electricity demand is expected to rise sharply. Hot weather and surging air conditioner use are predicted to absorb the additional supply. In addition, high import costs keep China’s domestic coal competitive. Local coal prices are tending to remain stable to slightly stronger. Official data also shows that China’s daily coal production is still above 12.5 million tonnes, while stocks at large power plants reach 190 million tonnes, sufficient for about 32 days of usage.