FX.co ★ Coal Inches Higher to $100

In May, Newcastle coal futures edged closer to the $100 per tonne mark, recovering from a four-year low of $93.7 experienced on April 23rd, amid transient supply concerns. Whitehaven reported that adverse weather conditions in the March quarter had hindered export activities during the previous month. Nonetheless, futures saw a 20% decrease this year, attributed to the growing prevalence of renewable energy sources in power generation and a reduced need for heating due to a milder winter in China. As a result, fossil-fuel power production in China declined by 4.7% annually in the first quarter, leading to a 13.1% annual drop in thermal coal imports, which fell to 91.5 million tons by the end of April. On the supply side, Indonesia's production reached an unprecedented 836 million tonnes last year, surpassing its initial target by 18%, despite increased investment in alternative energy sources curbing demand for thermal coal. Additionally, China has announced plans to increase its output by 1.5% to 4.82 billion tons this year, following a record production level in 2024.