War Intensifies, Coal Prices Surge by Up to 17%

Global benchmark coal prices regained momentum in the last trading session of the week, as geopolitical tensions and supply uncertainty continued to support sentiment in the global coal market. On Friday trading (6 March 2026), prices for global coal for the April 2026 contract closed up 1.52% at US$137.3 per tonne. For the week, global coal prices surged 17.45% on a point-to-point basis. Energy market turmoil related to the war has spilled over into the coal sector. Demand for a gas substitute has pushed up prices for thermal coal used in electricity generation. Energy prices tend to move with rising gas prices, since coal and gas can substitute for one another. Therefore, when Qatar was forced to shut gas production facilities, spot gas prices surged and pushed coal prices higher. If the escalation continues, this could be enough to make coal-fired power generation cheaper, giving European countries an economic incentive to switch. However, some power plants have been permanently retired, such as the United Kingdom’s last coal-fired plant, closed in 2024. Overall, the amount of available coal-fired generation capacity in Europe has fallen by around 40%, according to ICIS estimates, though some may be recoverable in emergencies. Nevertheless, export supplies remain high in major producing countries, while shipping costs and energy market volatility add pressure to shipping prices. However, buying activity remains selective as many buyers hold adequate inventories and prefer to monitor market developments. Overall, sentiment remains cautious, with market participants adopting a wait-and-see approach amid widening supply-demand gaps and uncertain supply signals.