Coking Coal climbs above $90/tonne for first time in 2 years

The coal market extended its upward momentum, with futures climbing above the $90 per tonne level for the first time since March 2019.

Top consumer, China, is expected to face shortages in imports of coking coal from major supplier Mongolia after fresh COVID-19 restrictions were reintroduced at the Ganqimadodu border, the gateway for Mongolia coking coal to China, on March 16th.

Coal prices are up almost 80% from a nearly 4-year low of $50.45/tonne hit in August, supported by government policies, particularly China’s ban on Australian coal imports and supply issues after producers cut on output as prices weakened during the height of the lockdowns across Asia.

Coal is the major fuel used for generating electricity worldwide. China is the biggest producer and consumer of coal. Other big producers include: United States, India, Australia, Indonesia, Russia, South Africa, Germany and Poland.

The biggest exporters of coal are: Indonesia, Australia, Russia, United States, Colombia, South Africa and Kazakhstan.

Amaka E. Nliam/Trading Economics