European coal rises above $118/t as Middle East conflict lifts energy markets

Conflict and heat lift European energy prices

European coal quotations strengthened above $118/t as military escalation in the Middle East pushed oil and gas back toward recent local highs, Rambler Finance reported. The United States resumed strikes on Iran and blocked Iranian ports, while Iran responded with attempts to obstruct the Strait of Hormuz. Market uncertainty also increased after Donald Trump announced plans for a 20% charge on cargo passage through the strait and security provision.

Extreme heat provided additional support by increasing European power-generation demand. Margins at German coal-fired power plants improved over the past week as electricity prices rose, making coal generation more commercially attractive despite the broader supply uncertainty.

TTF gas quotations jumped 12.7% over the week to $651.99 per 1,000 cubic metres, an increase of $73.60. EU underground gas storage reached 53%, up 2 percentage points from July 8, 2026, but remained 10 points below the 63% recorded a year earlier. Coal inventories at ARA terminals declined by 0.07 million tonnes to 3.75 million tonnes.

Rhine and South African logistics tighten

Physical transport constraints reinforced the price signal. The Rhine water level at Kaub, a critical point for determining the river’s shipping capacity, fell to 45 centimetres from 72 centimetres a week earlier. Low water can restrict vessel loads and raise the cost of moving fuel into inland European markets.

The South African 6,000-calorie coal index followed Europe above $105/t. South Africa’s principal coal export railway was temporarily closed on July 15 after civil unrest halted trains to Richards Bay Coal Terminal. Operations resumed, while scheduled annual maintenance on the Northern Corridor remained set for July 21-August 1.

This was the railway’s third disruption since early June. A major derailment on June 8 interrupted operations for four days, and damage to the track between Illangakazi and Ulundi was repaired on July 13. Repeated stoppages leave exporters and buyers exposed to delays even after the main line returns to service.

Asian benchmarks diverge

High-grade Australian 6,000 coal strengthened above $129/t amid the renewed Middle East fighting. Temperatures reaching 36°C in Japan and South Korea could also increase coal burn at power stations. By contrast, the Australian HCC metallurgical coal index fell to $229/t because of unsold cargoes, weaker July-August steel consumption and subdued demand expectations among major importers.

In China, Qinhuangdao spot coal with 5,500 NAR eased to below $119/t. Heat and rain-related interruptions at several northern open-pit mines supported the domestic market, but participants expected any increase before the end of summer to be limited to 20-30 yuan/t, or $2.95-$4.42/t. Stocks at nine major ports declined by 0.82 million tonnes from July 8 to 28.22 million tonnes.

Indonesian prices moved in the opposite direction. The 5,900 GAR index fell to $104/t, while 4,200 GAR coal reached its lowest level since October 2023 at $62/t. Demand remained limited in China and India: typhoon disruption created port congestion in southern China, while monsoon rains reduced Indian electricity consumption and domestic coal covered most requirements. The contrast shows that Europe’s rally is being driven mainly by regional energy and logistics risks rather than a uniform strengthening of global coal demand.