European coal prices exceed $140 a tonne, reaching highest level since October 2023

Gas risks lift European coal

European coal prices have risen above $140 a tonne, their highest level since late October 2023. The advance follows an escalation of military activity between the United States and Iran, a Ukrainian attack on Russian gas facilities in Yamal, higher LNG prices and concerns that Europe will enter winter with insufficient gas inventories.

TTF gas prices climbed to $990 per 1,000 cubic metres, an increase of $111. EU underground gas storage was 67.3% full after gaining 1.7 percentage points, but remained 12.3 percentage points below the 79.6% recorded a year earlier. Expensive gas strengthens the economic case for coal-fired generation, although utilities must also account for carbon costs and physical access to fuel.

Low stocks and transport constraints tighten supply

Coal inventories at the Amsterdam-Rotterdam-Antwerp terminals stood at 4.1 million tonnes. A 100,000-tonne cargo from the United States was expected shortly, followed by Colombian material in October. Low water levels on the Rhine were restricting barge movements from import terminals to power plants, limiting the value of additional seaborne supply unless inland logistics improve.

German coal-fired generation declined as wind output increased and plants restricted production to conserve inventories. This suggests that the price rise reflects energy-security concerns and replacement costs more than an immediate surge in coal burn. European importers may still seek additional Atlantic supply if gas remains expensive, but the Rhine bottleneck and stronger prices in other regions could constrain procurement.

Asian markets add pressure to global benchmarks

South African 6,000-kilocalorie coal exceeded $128 a tonne, its highest level since April 2023. Stocks at Richards Bay fell to 2.10 million tonnes, while the loading backlog increased to 1.00 million tonnes. Indian buyers resisted higher prices for mid-calorific material, but 4,800 NAR coal continued moving to Bangladesh, Pakistan and Indian cement plants. India also faced domestic shortages as monsoon-related railway disruption reduced deliveries and Coal India redirected coal toward power stations with low stocks.

Indonesian prices reached their highest levels since May 2023 after prolonged drought lowered river levels and disrupted barge transport, particularly in Central Kalimantan. The 5,900 GAR index rose to $112 a tonne and 4,200 GAR material approached $73. Australia’s NEWC high-calorific index strengthened to $148, close to $150, supported by uncertainty over Indonesian export policy, expensive Asian LNG and higher import prices at Chinese ports.

China presents both support and downside risk

Spot 5,500 NAR coal at Qinhuangdao rose above $145 a tonne, up $12, amid restricted supply. Yet domestic Chinese signals were mixed: port prices increased while mine prices weakened, demand remained soft and discounts of 5–6 yuan a tonne appeared. Prices fell by 10–30 yuan a tonne in Inner Mongolia and remained stable in Shanxi after end-user purchasing slowed and cooler weather reduced air-conditioning demand.

China’s NDRC is examining higher coal shipments from Xinjiang, which is estimated to hold 2.19 trillion tonnes, about 40% of national reserves. Railway capacity remains the main constraint, although a new route linking Xinjiang and Shanxi opened in August 2026. More western coal reaching eastern and southern China would increase competition with imported thermal coal. In the near term, maintenance on the Daqin-Qinhuangdao railway and stockbuilding before the October 1–7 holiday could support prices, while forecasts of a warm El Niño winter could weaken seasonal demand.