Coal prices surge 17%, hitting 14-month high

Jakarta — Coal prices surged to the highest level since November 2024 amid escalating tensions. The April contract for coal in trade on Tuesday (3 March 2026) closed at USD 138 per tonne, a rise of 7.3%, the highest since 26 November 2024, or more than 1 year 2 months, 14 months. The rise also extended coal’s positive trend, rising 17.2% over the last two days. The spike occurred after Iran closed the Strait of Hormuz. About 22% or nearly a quarter of world oil supply passes through the Strait of Hormuz. About 20% of global LNG trade also passes through the Strait. The closure sent oil prices up 5% on Tuesday, while gas prices surged 23% in a day. This jump raised concerns about global gas supply and prompted utilities to switch from gas to coal. Asian countries heavily dependent on Middle Eastern LNG, such as Pakistan, India, and Bangladesh, were expected to increase coal consumption in the near term. In India, thermal coal from South Africa at Indian ports rose sharply on a weekly basis. Prices rose due to higher transport costs amid geopolitical tensions. Nevertheless, buyers remained cautious and did not fully accept the price surge, though cargo availability was relatively limited. Separately, from China, the metallurgical coal market in China at the start of March 2026 tended to weaken, pressured by rising supply and cautious demand from steel mills. Expectations of price declines, especially for coking coal, remained strong given mill margins and maintenance plans ahead of the Chinese government’s Two Sessions.