FX.co ★ Coal Eases from 3-Week High

Newcastle coal futures slightly declined to approximately $105 per tonne, down from the recent peak of $107 reached on September 29th. This movement has contributed to an overall loss of more than 15% for the year, largely due to abundant supply. In the first eight months, China's thermal coal production was 3% higher compared to the previous year, notwithstanding a temporary reduction in August, which was aimed at improving air quality for Beijing's military parade. Additionally, Indonesia, a leading coal producer, is projected to achieve an output exceeding 700 million tons by year-end, aligning with its target of 735 million tons. Furthermore, the expanding capacity for wind and solar power generation has sufficiently met the growth in electricity demand within the world's largest manufacturing sector, exerting additional pressure on coal prices. Despite this, Beijing has maintained steady coal power capacity to ensure a reliable power supply. In the short term, demand remains strong in Japan and South Korea, both of which are significant consumers of Newcastle coal grades.