FX.co ★ Thermal Coal Edges Higher from 4-Year Low

Newcastle coal futures experienced an upturn, reaching $97 per tonne, after hitting a four-year low of $93.7 on April 23rd. This rise was driven by concerns over potential supply disruptions from Australia, which temporarily countered the bearish impact of abundant Asian production and weak demand. Whitehaven, a key producer, reported that adverse weather during the March quarter affected export activity later in April, preventing further declines in Australian thermal coal prices. Nevertheless, futures have fallen more than 20% since the start of the year. In China, a milder winter reduced the demand for heating and, consequently, for thermal coal, thereby exacerbating the annual 1.3% decline in output from Chinese fossil-fuel power plants during the first two months of the year. Meanwhile, Indonesia's production reached a record 836 million tonnes last year, surpassing the original forecast by 18%, despite increased investments in alternative energy sources tempering the demand for thermal coal. Additionally, China aims to increase its production by 1.5% to 4.82 billion tons this year, following a record output projected for 2024.