Coal Prices Heat Up Again, Spurred by Oil Prices

Jakarta, CNBC Indonesia - Coal prices are heating up again amid the intensifying war. According to Refinitiv, coal prices closed on Monday (4/5/2026) at US$139.2 per tonne, up 1.16%. This is the highest price since 6 April 2026, or the past month. Coal prices are rising in tandem with the rebound in oil prices. Coal is a substitute commodity for oil, so their prices influence each other. US West Texas Intermediate (WTI) crude oil rose 4.39% to US$106.42 per barrel, while global benchmark Brent crude surged 5.8% to US$114.44 per barrel. The increase in coal prices reflects the spillover effect from rising risk premiums for oil and LNG, following the failure of peace talks between the United States and Iran, which leaves major shipping routes uncertain. Asia is increasingly relying on coal for baseload power generation, with Japan extending the use of coal-fired power plants and South Korea easing restrictions, while China is boosting domestic production and accelerating coal-to-gas projects to mitigate import risks. These changes affirm a broader shift towards energy security amid ongoing concerns over gas and oil supplies. Reports from China indicate that the metallurgical coke market is supported by sustained high steel production and improved logistics conditions. High hot metal production at steel mills keeps coke demand solid, preventing market weakness. Distribution of coal and coke is starting to flow smoothly again, reducing previous supply bottlenecks. Meanwhile, another major coal consumer, India, reported that Coal India Limited (CIL) recorded a 9.7% year-on-year decline in coal production in April 2026, to 56.1 million tonnes. This drop occurred due to operational challenges faced by several subsidiaries and seasonal adjustments following the peak production at the end of the fiscal year. Data released on 4 May 2026 shows that although production fell from 62.1 million tonnes in April 2025, coal dispatches were relatively stable, down only 2% to 63.2 million tonnes.