FX.co ★ Coal Rises to $110

As of early July, Newcastle coal futures experienced an increase, reaching $110 per tonne. This marks a continuation of the recovery from a four-year low of $93.7 observed at the end of April, prompted by minor improvements in demand. Trade data indicated that seaborne imports of thermal coal by major consumers India and China rose to a five-month peak in May. This trend is consistent with China's expansion of coal-generated energy capacity during the first quarter and the government’s directive to replenish reserves. Nevertheless, contracts for Newcastle coal set for delivery within the next month were still down over 15% on an annual basis, suggesting continued oversupply in the market. In the first quarter, China experienced a 4.7% decrease in fossil-fuel-based power generation compared to the previous year, amidst diminished electricity demand and robust contributions from renewable energy sources. Additionally, domestic coal production in China increased by 4% year-over-year in May. This growth is in line with China's earlier announcement of its intention to raise output by 1.5%, targeting a total of 4.82 billion tons for the year, following a record output projected for 2024.