Newcastle coal futures rose to $98 per tonne, rebounding from the four-year low of $93.7 reached on April 23rd, as mounting concerns over potential supply disruptions from Australia temporarily outweighed persistent bearish pressure stemming from robust Asian output and subdued demand.
Coal edges higher from four-year low
Mining giant Whitehaven reported that adverse weather during the March quarter hindered operations, leading to reduced export activity later in April, adding to the supply-side support for prices. In a separate development, the United States eased restrictions on its state-owned lender, allowing it to provide financing for coal plant projects—a move that could marginally support global demand for coal-related infrastructure in developing markets. Still, coal futures remain down around 20% year-to-date, driven largely by a warmer-than-average winter in China that significantly curtailed heating-related power consumption and weighed on thermal coal imports. This decline in seasonal demand was compounded by a 1.3% year-over-year drop in output from Chinese fossil-fuel power plants in the first two months of the year, highlighting the broader deceleration in coal usage across the country.
Indonesia ramps up coal production
Meanwhile, Indonesia ramped up coal production to a record 836 million tonnes in 2024, exceeding its official target by 18% and reinforcing the global oversupply narrative. However, this surge in output occurred against the backdrop of increasing investments in renewable energy and other alternative power sources, which continued to limit long-term demand for thermal coal. Looking ahead, China plans to boost domestic coal production by an additional 1.5% to 4.82 billion tons in 2025, following its record-breaking output last year, underscoring Beijing’s ongoing strategy to prioritize energy security—despite its parallel push toward greener energy initiatives. These dynamics suggest that while short-term supply concerns may offer occasional price relief, structural factors continue to pose significant headwinds for sustained coal price recovery.
