Asian Thermal Coal Prices Poised to Remain Elevated

Indonesian exports face a dual threat from government production quotas and the lingering effects of El Niño. Drought conditions have significantly reduced river water levels, creating a logistical bottleneck that prevents coal barges from reaching export ports efficiently. This instability is compounded by regulatory ambiguity within the mining sector, leaving buyers in Japan and South Korea facing limited and unpredictable supply lines.

Simultaneously, China’s domestic output remains depressed following a series of stringent safety crackdowns triggered by a major mining disaster in May. While production figures for September showed a month-on-month recovery, they remain 6.8% below the same period last year. With the Middle East conflict further incentivizing utilities to prioritize coal over gas, the Newcastle futures benchmark continues to trade 30% higher than pre-war levels, signaling that the current price floor for high-calorific coal is unlikely to break in the near term.