Thermal coal prices in Europe hit their highest level in the current year amid declining supply and rising natural gas prices.
Thermal coal with a calorific value of 6,000 kcal /kg rose in price in North-Western Europe (NWE) by the end of September by about 15% compared to the last days of August, to USD 57.23 per ton (cif Amsterdam - Rotterdam - Antwerp) , according to Argus . Coal demand in European countries increased in early autumn. The production of coal-fired power plants in Germany, France, the UK and Spain in September, for the first time in 2020, exceeded the level of a year ago. The total loading of coal-fired thermal power plants in these countries in the current month averaged 7.1 GW, which is 41% more than in the same month last year. The growth of coal-fired generation is facilitated by the decrease in electricity production at European nuclear power plants, as well as the strengthening of coal's position in the fuel competition with natural gas. Gas generation in Europe is becoming less profitable compared to coal-fired power plants due to a sharp rise in the price of natural gas in the region's spot market. Natural gas prices at the TTF trading hub in the Netherlands have so far increased by about 23% compared to the end of last month, exceeding $ 150 per thousand cubic meters.
At the same time, imports of thermal coal in European countries are rapidly decreasing. The supply of solid fuel from Russia through the ports of the North-West region over the past eight months decreased by 21% compared to the same period in 2019, to 37.6 million tons, according to rail freight forwarders. Strikes at one of Colombia's large coal mines have also led to limited supply of coal on the European market. As a result, coal reserves in major ports of NWE are gradually decreasing, amounting to 5.9 million tons at the end of September, which is 1.4 million tons less than a year earlier.