The price of 6,000 kcal /kg thermal coal in Northwest Europe (NWE) increased by 16.5% over the past week, to $ 232.20 per ton in the Port of Rotterdam, reaching its highest level in at least twenty years. Fuel prices exceeded the previous record set in 2008 by about 6%.
The rise in coal prices accelerated at the end of September against the backdrop of a rapid increase in the cost of natural gas and a shortage of coal supply in the European market. The demand for solid fuels in the region continues to grow, as the profitability of coal-fired generation in European countries is many times higher than the revenues from the production of electricity from gas-fired thermal power plants.
The total electricity generation at coal-fired thermal power plants in Germany, Spain, Great Britain and France in September amounted to about 7 million MWh, which is 35% more than a year earlier. At the same time, the supply of coal in the European market remains limited, since the main countries that supply solid fuel in the region do not have time to increase fuel exports at such a high rate. As a result, coal reserves in NWE ports are currently at their lowest level in the past five years for this time of year, barely exceeding 4 million tonnes.
European consumers are forced to compete for free volumes of coal with buyers in Asia, where there is also a shortage of solid fuels, which, in turn, contributes to higher prices. Currently, imported coal in Europe is about 14% more expensive than in Asia, although until the end of August the Asian coal market was premium in relation to the European one.