European thermal coal rises to $133 as Hormuz uncertainty lifts fuel-switching risk

Gas risk pushes European coal higher

European thermal coal prices continued rising to $133 per tonne as uncertainty over LNG shipments through the Strait of Hormuz increased the value of alternative generation fuels. According to Rambler Finance’s coal market review, volatility in paper markets followed another round of talks between the United States and Iran, mediated by Pakistan. Islamabad is seeking a new 60-day ceasefire that would at least reopen passage through the strait.

TTF gas prices rose by $48.79 per 1,000 cubic metres, or 6.3%, during the week to $821.96 per 1,000 cubic metres. EU underground storage facilities were 63.5% full, up 1.9 percentage points from the previous week but 12.7 points below the 76.2% recorded a year earlier. The combination of expensive gas and comparatively low inventories increases the risk that utilities will preserve LNG and burn more coal where generation fleets and emissions rules permit.

Atlantic suppliers face logistical constraints

The South African 6,000-grade coal index moved above $116 per tonne. Transnet partially reopened the railway to Richards Bay Coal Terminal on August 25 after the derailment of 29 coal wagons on August 21 forced both tracks to close. Stronger exports and reduced deliveries after the accident cut terminal stocks by almost 10% to 3.83 million tonnes.

Pakistan became the largest weekly destination for South African coal for the second time during the month, receiving 287,000 tonnes compared with India’s 154,000 tonnes. The review said Pakistan’s demand was likely to persist because of an acute gas shortage linked to the US-Iran conflict. Other destinations included Sri Lanka, Israel and Yemen.

Asian supply tightens ahead of seasonal demand

At Qinhuangdao, Chinese 5,500 NAR spot coal strengthened to $127–128 per tonne. Small mines stopped after exhausting monthly production quotas, heavy rain restricted output, and coastal consumers increased purchases before a series of typhoons. Stocks at nine major ports fell by 750,000 tonnes to 26.02 million tonnes, while inventories at six major coastal power plants increased by 80,000 tonnes to 14.10 million tonnes. Production may begin recovering in September as some mines complete maintenance.

Indonesia’s 5,900 GAR index rose to $105.5 per tonne and 4,200 GAR material reached $66.5. Low water levels on the Barito River in Central Kalimantan prompted some producers to declare force majeure, threatening transport from mines to export terminals. September Panamax cargoes of 4,200 kcal/kg GAR coal were reportedly sold at $70–71 per tonne FOB Kalimantan, above agency assessments. Delays in approving Indonesian production quotas add another constraint.

High-grade coal reflects broader procurement pressure

Australian 6,000-grade thermal coal climbed above $137 per tonne, supported by higher LNG costs, Indonesian supply uncertainty and hot weather in Northeast Asia. Australian hard coking coal rose to $265 per tonne as Chinese demand remained strong amid safety inspections in Shanxi and slower Mongolian deliveries. Russian PCI prices also increased on Chinese demand, limited Russian availability and higher freight costs.

China imported 268.1 million tonnes of coal in January–July 2026, 4.2% more than a year earlier. Indonesia supplied 106.3 million tonnes and Mongolia 68.6 million tonnes, while Russian shipments fell 14.8% to 43.9 million tonnes and Australian volumes declined 2.6% to 41.1 million tonnes. These shifts leave buyers exposed to disruptions across several origins precisely as gas uncertainty raises coal’s value as a substitute fuel.