FX.co ★ Coal Extends Rebound from 4-Year Low

In July, Newcastle coal futures experienced an increase, reaching $111 per tonne, marking a steady recovery from April's four-year low of $93.7. This was supported by signs of renewed demand. Trade reports indicated that imports of thermal coal by sea to leading consumers, India and China, reached their highest levels in five months as of May. This coincided with China's expansion of coal-powered capacity in the first quarter and directives from their state planner to replenish stockpiles. However, the front-month Newcastle contracts remained over 15% below the previous year's figures, reflecting a market that stays mostly oversupplied. Chinese output from fossil-fuel energy sources saw a 4.7% annual decline in the first quarter due to reduced power demand and a robust supply from renewable energy sources. In contrast, China's domestic coal production increased by 4% compared to the previous year in May, in line with plans to boost output by 1.5% to reach 4.82 billion tons this year, following the record production anticipated for 2024.