European Coal Falls Below $135 as Gas Weakens and Regional Markets Diverge

European coal follows gas prices lower

European coal quotations fell below $135 per tonne during the week, following a decline in natural-gas prices. Gas and oil contracts dropped sharply at the start of the trading session amid hopes that dialogue between the United States and Iran could resume and that the Strait of Hormuz might reopen, according to the market review published by finance.rambler.ru.

TTF gas prices declined 5% over the week to $881.22 per 1,000 cubic metres, a decrease of $47.55. European Union underground gas storage was 70.1% full, up 1.4 percentage points from September 16, 2026, but 11.3 percentage points below the 81.4% recorded a year earlier. Lower gas costs improved the competitive position of gas-fired generation and reduced support for coal prices.

Germany’s coal plant margins nevertheless strengthened as electricity prices rose and renewable generation declined. Coal spreads increased to €61.48 per MWh from €49.00, while power prices advanced from almost €177.00 to €190.00 per MWh. Gas-fired plants moved to a positive margin of €5.86 per MWh from a loss of €17.38 a week earlier. Renewables supplied slightly less than 60% of the system, down from 67%, while the fossil-fuel share increased by just over 7%.

Asian supply constraints produce mixed prices

South African 6,000-grade coal retreated from three-year highs to $121 per tonne, ending a three-week rally. Indian market activity slowed during holidays, and sponge-iron producers withdrew from the import market. Sellers were offering standard South African coal at noticeable discounts to the API4 index.

In China, spot prices for 5,500 NAR coal at Qinhuangdao rose to $146 per tonne. Output in major mining regions remained stable but constrained by capacity limits, safety inspections before the October 1-7 National Day holiday and planned mine maintenance. Hot weather in some regions and weaker hydropower generation also supported coal consumption. Inventories at nine major ports reached 24.53 million tonnes, up 0.70 million tonnes from September 16, while stocks at six major coastal power plants rose 0.11 million tonnes to 14.33 million tonnes.

Indonesian 5,900 GAR coal held at $114 per tonne, while 4,200 GAR material fell to $75.5. Spot availability remained limited by firm domestic demand and low water levels in Kalimantan. Indonesia, the world’s largest coal exporter, imported 10.13 million tonnes of thermal coal in the first 8.5 months of 2026, an increase of 5.64 million tonnes, or 125%, year on year. The volume already exceeded the 8.59 million tonnes imported during the previous year.

Australian and Russian outlooks highlight demand risk

Australian high-calorific 6,000 coal remained at $144 per tonne, supported by interest in index-linked transactions, while mid-calorific material weakened. The Australian hard coking coal index fell to $275 per tonne as buying interest from China and India stayed subdued. A decision on extending Hunter Valley Operations, comprising two export-oriented thermal coal mines, was postponed until September 30 by the New South Wales Independent Planning Commission.

Russia’s government, meanwhile, approved a coal industry programme extending to 2050. Its target scenario raises production from 443.0 million tonnes in 2024 to 530.1 million in 2030 and 662.0 million in 2050, while exports rise from 197.6 million to 350.1 million tonnes. The stress scenario instead reduces production to 318.9 million tonnes and exports to 100.5 million tonnes by 2050. The wide range underlines how global demand, prices, sanctions and eastbound rail capacity will determine whether planned Russian supply reaches Asian markets.