Energy Industries Bulk Commodity Intelligence
1. [PPI] National Bureau of Statistics: In March 2026, the national Producer Price Index (PPI) for manufactured goods turned from a year-on-year decline of 0.9% in the previous month to an increase of 0.5%; on a month-on-month basis, it rose by 1.0%, an increase of 0.6 percentage points compared to the previous month. The purchasing price index for industrial producers shifted from a year-on-year decline of 0.7% in the previous month to an increase of 0.8%; on a month-on-month basis, it rose by 1.2%, an increase of 0.5 percentage points compared to the previous month. For the first quarter, the PPI for manufactured goods declined by 0.6% year-on-year, while the purchasing price index for industrial producers declined by 0.5%.
2. [CPI] National Bureau of Statistics: In March 2026, the national Consumer Price Index (CPI) rose by 1.0% year-on-year and declined by 0.7% month-on-month. On average, from January to March, the national CPI rose by 0.9% compared to the same period of the previous year.
3. [US Initial Jobless Claims] Last week, the number of initial claims for unemployment benefits in the United States stood at 219,000, compared to an expectation of 210,000 and a previous reading of 202,000.
1. [Crude Oil] On April 9, international crude oil futures closed higher. The settlement price for the May contract of US WTI crude oil futures was $97.87 per barrel, an increase of $3.46, or 3.7%. The settlement price for the June contract of Brent crude oil futures was $95.92 per barrel, an increase of $1.17, or 1.2%.
2. [Crude Oil] On April 9, the US Department of Energy announced that it is seeking to exchange up to 30 million barrels of low-sulfur crude oil from the West Hackberry Strategic Petroleum Reserve (SPR) site. This marks the third time that tenders have been issued to oil companies since fuel prices began to soar following the conflict between the US and Iran.
3. [Crude Oil] Japanese Prime Minister Sanae Takaichi stated that Japan would begin releasing oil reserves equivalent to 20 days' worth of consumption starting in early May. She noted that while Japan possesses ample inventory, some concerns regarding supply still persist.
4. [Crude Oil] On Thursday, the Saudi Press Agency (SPA) cited an official from the Ministry of Energy as reporting that attacks targeting Saudi energy facilities have reduced the Kingdom's oil production capacity by approximately 600,000 barrels per day, while throughput on its East-West Pipeline has declined by about 700,000 barrels per day.
5. [Petroleum Coke] On April 9, Wudi Xinyue quoted petroleum coke at 1,893 RMB per ton—an increase of 90 RMB per ton compared to the previous trading day. The product features a sulfur content of approximately 4%, and is produced by a delayed coking unit with an annual capacity of 600,000 tons and a daily output of 500 tons
1. [PPI] National Bureau of Statistics: In March 2026, the national Producer Price Index (PPI) for manufactured goods turned from a year-on-year decline of 0.9% in the previous month to an increase of 0.5%; on a month-on-month basis, it rose by 1.0%, an increase of 0.6 percentage points compared to the previous month. The purchasing price index for industrial producers shifted from a year-on-year decline of 0.7% in the previous month to an increase of 0.8%; on a month-on-month basis, it rose by 1.2%, an increase of 0.5 percentage points compared to the previous month. For the first quarter, the PPI for manufactured goods declined by 0.6% year-on-year, while the purchasing price index for industrial producers declined by 0.5%.
2. [CPI] National Bureau of Statistics: In March 2026, the national Consumer Price Index (CPI) rose by 1.0% year-on-year and declined by 0.7% month-on-month. On average, from January to March, the national CPI rose by 0.9% compared to the same period of the previous year.
3. [US Initial Jobless Claims] Last week, the number of initial claims for unemployment benefits in the United States stood at 219,000, compared to an expectation of 210,000 and a previous reading of 202,000.
1. [Crude Oil] On April 9, international crude oil futures closed higher. The settlement price for the May contract of US WTI crude oil futures was $97.87 per barrel, an increase of $3.46, or 3.7%. The settlement price for the June contract of Brent crude oil futures was $95.92 per barrel, an increase of $1.17, or 1.2%.
2. [Crude Oil] On April 9, the US Department of Energy announced that it is seeking to exchange up to 30 million barrels of low-sulfur crude oil from the West Hackberry Strategic Petroleum Reserve (SPR) site. This marks the third time that tenders have been issued to oil companies since fuel prices began to soar following the conflict between the US and Iran.
3. [Crude Oil] Japanese Prime Minister Sanae Takaichi stated that Japan would begin releasing oil reserves equivalent to 20 days' worth of consumption starting in early May. She noted that while Japan possesses ample inventory, some concerns regarding supply still persist.
4. [Crude Oil] On Thursday, the Saudi Press Agency (SPA) cited an official from the Ministry of Energy as reporting that attacks targeting Saudi energy facilities have reduced the Kingdom's oil production capacity by approximately 600,000 barrels per day, while throughput on its East-West Pipeline has declined by about 700,000 barrels per day.
5. [Petroleum Coke] On April 9, Wudi Xinyue quoted petroleum coke at 1,893 RMB per ton—an increase of 90 RMB per ton compared to the previous trading day. The product features a sulfur content of approximately 4%, and is produced by a delayed coking unit with an annual capacity of 600,000 tons and a daily output of 500 tons
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Ongoing Geopolitical Turmoil in the Middle East Drives Chemicals Continued Broad-Based Price
Since April 2026, recurring geopolitical conflicts in the Middle East have disrupted global energy and chemical supply chains. High crude oil prices, constraints on overseas production facilities, and tight import supplies have collectively driven an overall upward trend in domestic chemical product prices. The cost advantage of the coal-to-chemicals route has become more pronounced, and industry price differentials have improved significantly. Based on Business Society’s latest benchmark prices as of April 13 and comparative data from early April, this analysis systematically examines the logic behind the current price fluctuations, product-specific divergences, and future market trends.
I. Cost-Driven Price Increases: Synergy of High Crude Oil Prices and Supply Shortages
The core drivers of this broad-based price surge in chemical products are rising costs and contracting overseas supply. Intermittent disruptions to shipping through the Strait of Hormuz have intensified global concerns over crude oil supply, keeping Brent crude at elevated levels and directly driving up production costs for oil-based chemical products. Meanwhile, as a major exporter of methanol and other products, Iran’s shipping disruptions have led to a significant reduction in import volumes. Domestic port inventories have been rapidly depleted, creating a dual bullish factor of “rising costs and tightening supply.”
Data shows that the SunSirs Brent crude benchmark price on April 13 was $115.00 per barrel, up 27.8% from $90.00 per barrel at the beginning of April; the WTI crude benchmark price was $101.40 per barrel, up 26.0% from the start of the month. Across-the-board increases in energy prices have driven up costs across the petroleum industry chain, serving as the core driver behind the rise in chemical product prices.
II. Key Product Prices and Price Movement Logic (Including Comparison with SunSirs Benchmark Prices)
Methanol: On April 13, the SunSirs benchmark price was 3,320.00 RMB/ton, up 7.1% from 3,100.00 RMB/ton at the beginning of the month. Hindered imports from Iran have led to a continuous decline in port inventories. Improved profitability in the coal-to-chemicals route, coupled with a tight supply-demand balance, has driven prices higher.
Acetic Acid: On April 13, the benchmark price for acetic acid, as reported by SunSirs, stood at RMB4,750.00 per ton—an increase of 14.73% compared to the beginning of the month (RMB4,140.00 per ton).. Rising methanol prices, combined with low operating rates at some facilities, have created tight supply conditions that supported price increases.
Since April 2026, recurring geopolitical conflicts in the Middle East have disrupted global energy and chemical supply chains. High crude oil prices, constraints on overseas production facilities, and tight import supplies have collectively driven an overall upward trend in domestic chemical product prices. The cost advantage of the coal-to-chemicals route has become more pronounced, and industry price differentials have improved significantly. Based on Business Society’s latest benchmark prices as of April 13 and comparative data from early April, this analysis systematically examines the logic behind the current price fluctuations, product-specific divergences, and future market trends.
I. Cost-Driven Price Increases: Synergy of High Crude Oil Prices and Supply Shortages
The core drivers of this broad-based price surge in chemical products are rising costs and contracting overseas supply. Intermittent disruptions to shipping through the Strait of Hormuz have intensified global concerns over crude oil supply, keeping Brent crude at elevated levels and directly driving up production costs for oil-based chemical products. Meanwhile, as a major exporter of methanol and other products, Iran’s shipping disruptions have led to a significant reduction in import volumes. Domestic port inventories have been rapidly depleted, creating a dual bullish factor of “rising costs and tightening supply.”
Data shows that the SunSirs Brent crude benchmark price on April 13 was $115.00 per barrel, up 27.8% from $90.00 per barrel at the beginning of April; the WTI crude benchmark price was $101.40 per barrel, up 26.0% from the start of the month. Across-the-board increases in energy prices have driven up costs across the petroleum industry chain, serving as the core driver behind the rise in chemical product prices.
II. Key Product Prices and Price Movement Logic (Including Comparison with SunSirs Benchmark Prices)
Methanol: On April 13, the SunSirs benchmark price was 3,320.00 RMB/ton, up 7.1% from 3,100.00 RMB/ton at the beginning of the month. Hindered imports from Iran have led to a continuous decline in port inventories. Improved profitability in the coal-to-chemicals route, coupled with a tight supply-demand balance, has driven prices higher.
Acetic Acid: On April 13, the benchmark price for acetic acid, as reported by SunSirs, stood at RMB4,750.00 per ton—an increase of 14.73% compared to the beginning of the month (RMB4,140.00 per ton).. Rising methanol prices, combined with low operating rates at some facilities, have created tight supply conditions that supported price increases.
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Energy markets at the centre of the Iran war shock
👉🏻Oil markets tighten rapidly
The Strait of Hormuz is a critical global energy corridor, carrying around one fifth of global oil and LNG trade. Its disruption has removed a major supply channel and sharply tightened market balances.
Around 10 million barrels per day of oil exports have been stranded, with only partial rerouting available. This has pushed Brent crude above $100 per barrel, with prices expected to rise further in the near term.
Even as flows begin to recover, normalisation is likely to be gradual. Restarting production, clearing logistical backlogs and managing ongoing security risks will continue to constrain supply. As a result, a sustained geopolitical risk premium is now embedded in oil prices.
👉🏻Gas markets under even greater pressure
Natural gas markets have seen an even more pronounced shock. The shutdown of Qatari LNG exports, which account for roughly one fifth of global supply, has driven sharp price increases.
The impact is most severe in Europe and Asia, where reliance on LNG imports is highest. European prices have been revised up significantly due to both supply losses and the need to rebuild storage. By contrast, US prices have risen only modestly due to domestic supply insulation.
This divergence highlights how regional exposure and infrastructure constraints are shaping price outcomes across gas markets.
👉🏻Industrial metals: A growing divergence
Aluminium leads the upside
Aluminium is the most exposed industrial metal in the current environment. The Gulf region accounts for a meaningful share of global supply, meaning disruptions have an immediate impact on availability.
At the same time, aluminium production is highly energy intensive. Rising energy prices are pushing up production costs globally, reinforcing upward pressure on prices.
Prices are expected to approach $3,450 per tonne in the second quarter, close to record levels.
However, further gains are likely to be capped. Higher prices will weigh on demand, encourage substitution and eventually lead to some moderation later in the year. The balance between supply disruption and demand destruction will be key in determining the path ahead.
👉🏻Other metals face cyclical pressure
In contrast, other base metals such as copper are facing weaker fundamentals. Recent price strength has been partly driven by speculative positioning rather than underlying demand.
As financial conditions tighten, this support is beginning to unwind. A stronger US dollar and rising inventories are adding further downward pressure.
This creates a clear divergence within the metals complex, with aluminium supported by disruption and costs, while others remain exposed to cyclical weakness and softer demand conditions.
👉🏻Oil markets tighten rapidly
The Strait of Hormuz is a critical global energy corridor, carrying around one fifth of global oil and LNG trade. Its disruption has removed a major supply channel and sharply tightened market balances.
Around 10 million barrels per day of oil exports have been stranded, with only partial rerouting available. This has pushed Brent crude above $100 per barrel, with prices expected to rise further in the near term.
Even as flows begin to recover, normalisation is likely to be gradual. Restarting production, clearing logistical backlogs and managing ongoing security risks will continue to constrain supply. As a result, a sustained geopolitical risk premium is now embedded in oil prices.
👉🏻Gas markets under even greater pressure
Natural gas markets have seen an even more pronounced shock. The shutdown of Qatari LNG exports, which account for roughly one fifth of global supply, has driven sharp price increases.
The impact is most severe in Europe and Asia, where reliance on LNG imports is highest. European prices have been revised up significantly due to both supply losses and the need to rebuild storage. By contrast, US prices have risen only modestly due to domestic supply insulation.
This divergence highlights how regional exposure and infrastructure constraints are shaping price outcomes across gas markets.
👉🏻Industrial metals: A growing divergence
Aluminium leads the upside
Aluminium is the most exposed industrial metal in the current environment. The Gulf region accounts for a meaningful share of global supply, meaning disruptions have an immediate impact on availability.
At the same time, aluminium production is highly energy intensive. Rising energy prices are pushing up production costs globally, reinforcing upward pressure on prices.
Prices are expected to approach $3,450 per tonne in the second quarter, close to record levels.
However, further gains are likely to be capped. Higher prices will weigh on demand, encourage substitution and eventually lead to some moderation later in the year. The balance between supply disruption and demand destruction will be key in determining the path ahead.
👉🏻Other metals face cyclical pressure
In contrast, other base metals such as copper are facing weaker fundamentals. Recent price strength has been partly driven by speculative positioning rather than underlying demand.
As financial conditions tighten, this support is beginning to unwind. A stronger US dollar and rising inventories are adding further downward pressure.
This creates a clear divergence within the metals complex, with aluminium supported by disruption and costs, while others remain exposed to cyclical weakness and softer demand conditions.
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What is the overall trend in commodity prices?
The Middle East war continued to squeeze global oil and natural gas markets into the first half of April as the number of vessels traveling through the Strait of Hormuz remains close to zero. Our forecast assumes at least a partial recovery in oil flows through the Strait of Hormuz by the end of April, with a gradual ramp-up over May.
The major impacts from the Middle East war are on crude oil and refined products, natural gas, chemicals and plastics, and a few nonferrous metals. The Materials Price Index (MPI) by S&P Global Market Intelligence will peak in the second quarter about 25% higher than the pre-war forecast. As measured by the MPI, industrial materials prices increased more than 10% in the first quarter of 2026 and are forecast for another double-digit increase in the second quarter. The process to pass through higher manufacturing costs will be limited by weaker demand, however.
The impact of high gasoline and other affected consumer goods prices leads to higher inflation that squeezes household budgets. A major impact will be lower near-term spending on big purchases like cars, appliances and new homes, weighing on demand for industrial materials. The lower economic growth projections for major economies likewise imply a less upbeat outlook for businesses. At the time of writing, we are already about six weeks into the eight weeks this outlook assumes that trade through the Strait of Hormuz is near zero. The risk of a longer-lasting disruption, and thus tighter material supply and larger downward impact on demand, is significant and growing.
The Middle East war continued to squeeze global oil and natural gas markets into the first half of April as the number of vessels traveling through the Strait of Hormuz remains close to zero. Our forecast assumes at least a partial recovery in oil flows through the Strait of Hormuz by the end of April, with a gradual ramp-up over May.
The major impacts from the Middle East war are on crude oil and refined products, natural gas, chemicals and plastics, and a few nonferrous metals. The Materials Price Index (MPI) by S&P Global Market Intelligence will peak in the second quarter about 25% higher than the pre-war forecast. As measured by the MPI, industrial materials prices increased more than 10% in the first quarter of 2026 and are forecast for another double-digit increase in the second quarter. The process to pass through higher manufacturing costs will be limited by weaker demand, however.
The impact of high gasoline and other affected consumer goods prices leads to higher inflation that squeezes household budgets. A major impact will be lower near-term spending on big purchases like cars, appliances and new homes, weighing on demand for industrial materials. The lower economic growth projections for major economies likewise imply a less upbeat outlook for businesses. At the time of writing, we are already about six weeks into the eight weeks this outlook assumes that trade through the Strait of Hormuz is near zero. The risk of a longer-lasting disruption, and thus tighter material supply and larger downward impact on demand, is significant and growing.
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Futures traders expect China-Northern Europe ocean freight rates to rise to $3 100/FEU by the end of July 2026.
On April 22, 2026, Brent futures were above $97/barrel (+35% since the end of February) amid a lack of progress in US-Iran negotiations and the continued blockade of the Strait of Hormuz [Trading Economics]. VLSFO in Singapore fell to ~$680/ton (+30%) [Ship&Bunker].
On April 10, China State Railway Group held a coordination meeting in Xi’an with China-Europe transport operators [CARS]. According to participants, priorities for 2026 are shifting from volume growth to quality improvement: stricter control of congestion at border stations, reducing announcements of additional trains, and narrowing the price gap between routes.
CMA CGM continues its phased return to the Suez Canal: the MEX route (Asia — Mediterranean) has been added to the BEX2 and MEDEX services [Linerlytica]. According to unconfirmed reports, the Ocean Rise Express (Japan-Northern Europe) service will also be rerouted via the Red Sea soon. CMA CGM remains the only major carrier to have resumed partial transits through the Suez Canal.
On April 22, 2026, Brent futures were above $97/barrel (+35% since the end of February) amid a lack of progress in US-Iran negotiations and the continued blockade of the Strait of Hormuz [Trading Economics]. VLSFO in Singapore fell to ~$680/ton (+30%) [Ship&Bunker].
On April 10, China State Railway Group held a coordination meeting in Xi’an with China-Europe transport operators [CARS]. According to participants, priorities for 2026 are shifting from volume growth to quality improvement: stricter control of congestion at border stations, reducing announcements of additional trains, and narrowing the price gap between routes.
CMA CGM continues its phased return to the Suez Canal: the MEX route (Asia — Mediterranean) has been added to the BEX2 and MEDEX services [Linerlytica]. According to unconfirmed reports, the Ocean Rise Express (Japan-Northern Europe) service will also be rerouted via the Red Sea soon. CMA CGM remains the only major carrier to have resumed partial transits through the Suez Canal.
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Energy prices are projected to surge by 24% this year to their highest level since Russia’s invasion of Ukraine in 2022, as the war in the Middle East sends a severe shock through global commodity markets, according to the World Bank Group's latest Commodity Markets Outlook.
Overall commodity prices are forecast to rise 16% in 2026, driven by soaring energy and fertilizer prices and record-high prices for several key metals.
The shock will have serious implications for job creation and development, the analysis indicates.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35% of global seaborne crude oil trade, have triggered the largest oil supply shock on record, with an initial reduction in global oil supply of about 10 million barrels per day. Even after moderating from their recent peak, Brent oil prices remained more than 50% higher in mid-April than they were at the start of the year. Brent oil is forecast to average $86 a barrel in 2026, up sharply from $69 a barrel in 2025. These forecasts assume that the most acute disruptions end in May and that shipping through the Strait of Hormuz gradually returns to pre-war levels by late 2026.
“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest, as will developing economies already struggling under heavy debt burdens. All of this is a reminder of a stark truth: war is development in reverse.”
Fertilizer prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices. Fertilizer affordability will fall to its worst level since 2022, eroding farmers’ incomes and threatening future crop yields. If the conflict proves more prolonged, these pressures on food supply and affordability could push up to 45 million more people into acute food insecurity this year, according to the World Food Programme.
Prices for base metals, including aluminum, copper, and tin, are also expected to reach all-time highs, reflecting strong demand related to industries including data centers, electric vehicles, and renewable energy. Precious metals continue to break price and volatility records, with average prices forecast to increase 42% in 2026, as geopolitical uncertainty fuels demand for safe-haven assets.
Rising commodity prices caused by these shocks will increase inflation and dampen growth worldwide. In developing economies, inflation is now projected to average 5.1% in 2026 under the baseline assumptions—a full percentage point higher than was expected before the war and an increase from 4.7% last year. Growth in developing economies will also deteriorate as higher prices for essentials weigh on incomes and exports from the Middle East face sharp curbs.
Overall commodity prices are forecast to rise 16% in 2026, driven by soaring energy and fertilizer prices and record-high prices for several key metals.
The shock will have serious implications for job creation and development, the analysis indicates.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35% of global seaborne crude oil trade, have triggered the largest oil supply shock on record, with an initial reduction in global oil supply of about 10 million barrels per day. Even after moderating from their recent peak, Brent oil prices remained more than 50% higher in mid-April than they were at the start of the year. Brent oil is forecast to average $86 a barrel in 2026, up sharply from $69 a barrel in 2025. These forecasts assume that the most acute disruptions end in May and that shipping through the Strait of Hormuz gradually returns to pre-war levels by late 2026.
“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest, as will developing economies already struggling under heavy debt burdens. All of this is a reminder of a stark truth: war is development in reverse.”
Fertilizer prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices. Fertilizer affordability will fall to its worst level since 2022, eroding farmers’ incomes and threatening future crop yields. If the conflict proves more prolonged, these pressures on food supply and affordability could push up to 45 million more people into acute food insecurity this year, according to the World Food Programme.
Prices for base metals, including aluminum, copper, and tin, are also expected to reach all-time highs, reflecting strong demand related to industries including data centers, electric vehicles, and renewable energy. Precious metals continue to break price and volatility records, with average prices forecast to increase 42% in 2026, as geopolitical uncertainty fuels demand for safe-haven assets.
Rising commodity prices caused by these shocks will increase inflation and dampen growth worldwide. In developing economies, inflation is now projected to average 5.1% in 2026 under the baseline assumptions—a full percentage point higher than was expected before the war and an increase from 4.7% last year. Growth in developing economies will also deteriorate as higher prices for essentials weigh on incomes and exports from the Middle East face sharp curbs.
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On April 28, the Political Bureau of the CPC Central Committee convened a meeting to analyze and review the current economic situation and economic work.
The meeting emphasized the need to implement a more proactive fiscal policy and a moderately loose monetary policy with precision and effectiveness. It called for making full and effective use of macro-level policies, and for continuously optimizing the structure of fiscal expenditures. Furthermore, it urged tapping deeply into the potential of domestic demand, maintaining a reasonable share for the manufacturing sector, and thoroughly addressing "involuted" (excessively competitive) market practices. Finally, the meeting stressed the need to systematically respond to external shocks and challenges, while enhancing the level of security and assurance regarding energy and resource supplies.
The Customs Tariff Commission of the State Council issued an announcement stating that, effective from May 1, 2026, to April 30, 2028, zero tariffs—in the form of preferential rates—will be applied to imports from 20 African nations that have established diplomatic relations with China but are not classified as Least Developed Countries (LDCs). For products subject to tariff quotas, the tariff rate within the quota limit will be reduced to zero, while the tariff rate for quantities exceeding the quota will remain unchanged.
The Bank of Japan maintained its target interest rate at 0.75% for the third consecutive meeting, a decision that aligns with market expectations.
On April 28, international crude oil futures rose. The settlement price for the June contract of U.S. WTI crude oil futures stood at $99.93 per barrel, an increase of $3.56 (or 3.7%). The settlement price for the June contract of Brent crude oil futures reached $111.26 per barrel, up $3.03 (or 2.8%).
The United Arab Emirates (UAE) announced that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the "OPEC+" alliance, effective May 1, 2026.
The meeting emphasized the need to implement a more proactive fiscal policy and a moderately loose monetary policy with precision and effectiveness. It called for making full and effective use of macro-level policies, and for continuously optimizing the structure of fiscal expenditures. Furthermore, it urged tapping deeply into the potential of domestic demand, maintaining a reasonable share for the manufacturing sector, and thoroughly addressing "involuted" (excessively competitive) market practices. Finally, the meeting stressed the need to systematically respond to external shocks and challenges, while enhancing the level of security and assurance regarding energy and resource supplies.
The Customs Tariff Commission of the State Council issued an announcement stating that, effective from May 1, 2026, to April 30, 2028, zero tariffs—in the form of preferential rates—will be applied to imports from 20 African nations that have established diplomatic relations with China but are not classified as Least Developed Countries (LDCs). For products subject to tariff quotas, the tariff rate within the quota limit will be reduced to zero, while the tariff rate for quantities exceeding the quota will remain unchanged.
The Bank of Japan maintained its target interest rate at 0.75% for the third consecutive meeting, a decision that aligns with market expectations.
On April 28, international crude oil futures rose. The settlement price for the June contract of U.S. WTI crude oil futures stood at $99.93 per barrel, an increase of $3.56 (or 3.7%). The settlement price for the June contract of Brent crude oil futures reached $111.26 per barrel, up $3.03 (or 2.8%).
The United Arab Emirates (UAE) announced that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the "OPEC+" alliance, effective May 1, 2026.
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Daily Urea Output May Plunge; Signs of Price Decline Emerge
Recently, the urea market has largely remained firm, but judging by the recent price adjustments at some individual enterprises and the gradually leveling market premium, signs of a price decline are beginning to emerge. However, whilst industrial demand is falling, urea supply is also set to tighten significantly in the short term. So, will the market stabilize and strengthen again, returning to a firm trend?
Daily Output May Plunge in the Short Term
Earlier this month, three to five enterprises had scheduled maintenance, leading to a slight decline in daily output from its peak levels; overall daily production remained above 210,000 tons, with the short-term impact on supply being relatively limited. However, several additional enterprises have recently announced maintenance plans. Over the next week to ten days, it is expected that six to seven enterprises will halt production for maintenance, whilst the maintenance schedules for a few others remain to be confirmed. If all these plans are implemented, as illustrated in Figure 2, daily urea production could drop sharply in the short term from over 220,000 tons to around 205,000 tons. This daily output level is expected to be on par with the same period in previous years. Consequently, expectations of a tightening in short-term supply will intensify, significantly strengthening the positive support for market prices.
Limited impact on medium-term production
Based on current maintenance schedules, combined with production cuts due to temporary plant malfunctions, preliminary estimates suggest that average monthly urea output for May and June will be approximately 6.5 million tons. As May has one more day than April, output will see only a slight month-on-month decline; year-on-year, however, growth will shift from a significant increase to a modest one. Overall, the concentrated shutdowns for maintenance in the short term are having a relatively strong impact on the market, but from a medium-term perspective, the overall supply of urea remains ample.
Recently, the urea market has largely remained firm, but judging by the recent price adjustments at some individual enterprises and the gradually leveling market premium, signs of a price decline are beginning to emerge. However, whilst industrial demand is falling, urea supply is also set to tighten significantly in the short term. So, will the market stabilize and strengthen again, returning to a firm trend?
Daily Output May Plunge in the Short Term
Earlier this month, three to five enterprises had scheduled maintenance, leading to a slight decline in daily output from its peak levels; overall daily production remained above 210,000 tons, with the short-term impact on supply being relatively limited. However, several additional enterprises have recently announced maintenance plans. Over the next week to ten days, it is expected that six to seven enterprises will halt production for maintenance, whilst the maintenance schedules for a few others remain to be confirmed. If all these plans are implemented, as illustrated in Figure 2, daily urea production could drop sharply in the short term from over 220,000 tons to around 205,000 tons. This daily output level is expected to be on par with the same period in previous years. Consequently, expectations of a tightening in short-term supply will intensify, significantly strengthening the positive support for market prices.
Limited impact on medium-term production
Based on current maintenance schedules, combined with production cuts due to temporary plant malfunctions, preliminary estimates suggest that average monthly urea output for May and June will be approximately 6.5 million tons. As May has one more day than April, output will see only a slight month-on-month decline; year-on-year, however, growth will shift from a significant increase to a modest one. Overall, the concentrated shutdowns for maintenance in the short term are having a relatively strong impact on the market, but from a medium-term perspective, the overall supply of urea remains ample.
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Factbox-Governments worldwide shield households from rising energy costs
Governments worldwide are trying to shield consumers from soaring energy costs resulting from the U.S.-Israeli war on Iran. Here’s how different countries are responding:
👉🏻UK
Britain is looking to force older wind and solar generators onto fixed contracts in a bid to bring down consumer bills.
👉🏻THE NETHERLANDS
The Dutch government announced temporary tax breaks to compensate for rising fuel prices and said it would prepare further measures in case the energy crisis worsens.
👉🏻SWEDEN Sweden’s government will cut fuel taxes and hike electricity subsidies in its spring mini-budget as it strives to ease the pain for households of higher energy bills driven by the war.
👉🏻INDIA
India has asked motorists to avoid panic buying, saying there was no proposal to raise pump prices for diesel and gasoline, according to a government official.
India further raised a windfall tax on exports of diesel and aviation turbine fuel to ensure adequate domestic supply.
The country has barred consumers with piped natural gas from retaining or refilling LPG cylinders and has invoked emergency powers directing refiners to maximise LPG production, widely used for cooking.
👉🏻SOUTH KOREA
South Korea is easing limits on coal-fired power generation capacity and raising nuclear plant utilisation to as high as 80%.
It has begun enforcing a ban on naphtha exports to boost domestic supplies.
👉🏻CHINA
China has banned refined fuel exports to pre-empt a potential domestic fuel shortage, four sources said.
In mid-March, Beijing banned exports of nitrogen-potassium fertiliser blends and certain phosphate varieties, sources told Reuters.
👉🏻AUSTRALIA
Australia is releasing petrol/gasoline and diesel from domestic reserves to ease shortages affecting rural supply chains, mining and agriculture.
Its prime minister has encouraged citizens to use public transport.
👉🏻JAPAN
Japan said it will relax rules for the fiscal year that began in April to increase the use of coal-fired power plants. The country has also opened up its oil stockpiles, rolled out gasoline subsidies and is seeking energy supplies beyond the Middle East.
The country plans to increase imports of intermediate chemical products such as plastics, as it faces tighter naphtha supplies due to the conflict.
👉🏻EUROPEAN UNION
The European Union is considering requiring countries to hold stockpiles of jet fuel and potentially redistribute it based on regional needs and shortages.
The European Commission set out plans to cut electricity taxes and coordinate the summer refill of countries’ gas storage.
👉🏻SERBIA
Serbia will cut excise duties on crude oil by a cumulative 60% and has extended a ban on crude oil and fuel product exports to safeguard its domestic market.
👉🏻ITALY
Prime Minister Giorgia Meloni has said Italy is considering cutting excise duties to soften fuel prices and is ready to raise taxes on firms that unduly capitalise on the energy crisis.
👉🏻SPAIN
Spain’s government proposed measures worth 5 billion euros ($5.8 billion) to counter the economic impact of the Middle East conflict on local energy prices.
👉🏻ARGENTINA
The government has issued a decree to delay the effects of scheduled increases in taxes on liquid fuels and carbon dioxide.
Governments worldwide are trying to shield consumers from soaring energy costs resulting from the U.S.-Israeli war on Iran. Here’s how different countries are responding:
👉🏻UK
Britain is looking to force older wind and solar generators onto fixed contracts in a bid to bring down consumer bills.
👉🏻THE NETHERLANDS
The Dutch government announced temporary tax breaks to compensate for rising fuel prices and said it would prepare further measures in case the energy crisis worsens.
👉🏻SWEDEN Sweden’s government will cut fuel taxes and hike electricity subsidies in its spring mini-budget as it strives to ease the pain for households of higher energy bills driven by the war.
👉🏻INDIA
India has asked motorists to avoid panic buying, saying there was no proposal to raise pump prices for diesel and gasoline, according to a government official.
India further raised a windfall tax on exports of diesel and aviation turbine fuel to ensure adequate domestic supply.
The country has barred consumers with piped natural gas from retaining or refilling LPG cylinders and has invoked emergency powers directing refiners to maximise LPG production, widely used for cooking.
👉🏻SOUTH KOREA
South Korea is easing limits on coal-fired power generation capacity and raising nuclear plant utilisation to as high as 80%.
It has begun enforcing a ban on naphtha exports to boost domestic supplies.
👉🏻CHINA
China has banned refined fuel exports to pre-empt a potential domestic fuel shortage, four sources said.
In mid-March, Beijing banned exports of nitrogen-potassium fertiliser blends and certain phosphate varieties, sources told Reuters.
👉🏻AUSTRALIA
Australia is releasing petrol/gasoline and diesel from domestic reserves to ease shortages affecting rural supply chains, mining and agriculture.
Its prime minister has encouraged citizens to use public transport.
👉🏻JAPAN
Japan said it will relax rules for the fiscal year that began in April to increase the use of coal-fired power plants. The country has also opened up its oil stockpiles, rolled out gasoline subsidies and is seeking energy supplies beyond the Middle East.
The country plans to increase imports of intermediate chemical products such as plastics, as it faces tighter naphtha supplies due to the conflict.
👉🏻EUROPEAN UNION
The European Union is considering requiring countries to hold stockpiles of jet fuel and potentially redistribute it based on regional needs and shortages.
The European Commission set out plans to cut electricity taxes and coordinate the summer refill of countries’ gas storage.
👉🏻SERBIA
Serbia will cut excise duties on crude oil by a cumulative 60% and has extended a ban on crude oil and fuel product exports to safeguard its domestic market.
👉🏻ITALY
Prime Minister Giorgia Meloni has said Italy is considering cutting excise duties to soften fuel prices and is ready to raise taxes on firms that unduly capitalise on the energy crisis.
👉🏻SPAIN
Spain’s government proposed measures worth 5 billion euros ($5.8 billion) to counter the economic impact of the Middle East conflict on local energy prices.
👉🏻ARGENTINA
The government has issued a decree to delay the effects of scheduled increases in taxes on liquid fuels and carbon dioxide.
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In January–March 2026, Russian coking coal exports to China jumped up to 8.88 mio t (+0.73 mio t, or +9% y-o-y). In March, shipments surged to 3.37 mio t (+0.54 mio t, or +19% y-o-y, and +46.5% versus February 2026), because handling in ports was limited by adverse weather conditions in February, and part of February’s cargo was shifted to March as the weather improved. Higher shipment volumes were also supported by 2.6 times increase in transshipment at the Elga port, reaching 2.3 mio t (+1.4 mio t, or +159% y-o-y).
The increase in imports of Russian coking coal comes amid a decline in Chinese imports from Canada (–35% y-o-y) and an almost complete halt of U.S. raw materials (2.82 mio t in Q1 2025) as a result of 28% tariffs on U.S. coking coal introduced in 2025.
In Q1 2026, Russia remained the second-largest supplier of coking coal, although its share fell from 29.6% to 26.4%, as Mongolia nearly doubled its exports to to 18.71 mio t (+7.84 mio t, or +72% y-o-y). Australia ranks third with 2.08 mio t (+0.15 mio t, or +8% y-o-y). Canada dropped to fourth place with 1.89 mio t (–35% y-o-y).
Bar chart showing China’s coking coal imports in Q1 2025 and Q1 2026 with increased volumes and Russian share
In 2025, Russian coking coal exports to China increased to 32.8 mio t (+2.1 mio t, or +7% y-o-y).
Thus, amid tariffs against the U.S. and rising freight rates for Australian coal, Russian coking coal is becoming more competitive due to its price discounts and geographical proximity. In April, sea freight rates remain high, and Chinese importers may continue to prioritize procurement of Russian material.
India, the second-largest buyer of Russian metallurgical coal after China, has also been increasing its purchases from Russia in recent months. According to some forecasts, Russian coking coal supplies to India could grow by approximately 10% in 2026.
The increase in imports of Russian coking coal comes amid a decline in Chinese imports from Canada (–35% y-o-y) and an almost complete halt of U.S. raw materials (2.82 mio t in Q1 2025) as a result of 28% tariffs on U.S. coking coal introduced in 2025.
In Q1 2026, Russia remained the second-largest supplier of coking coal, although its share fell from 29.6% to 26.4%, as Mongolia nearly doubled its exports to to 18.71 mio t (+7.84 mio t, or +72% y-o-y). Australia ranks third with 2.08 mio t (+0.15 mio t, or +8% y-o-y). Canada dropped to fourth place with 1.89 mio t (–35% y-o-y).
Bar chart showing China’s coking coal imports in Q1 2025 and Q1 2026 with increased volumes and Russian share
In 2025, Russian coking coal exports to China increased to 32.8 mio t (+2.1 mio t, or +7% y-o-y).
Thus, amid tariffs against the U.S. and rising freight rates for Australian coal, Russian coking coal is becoming more competitive due to its price discounts and geographical proximity. In April, sea freight rates remain high, and Chinese importers may continue to prioritize procurement of Russian material.
India, the second-largest buyer of Russian metallurgical coal after China, has also been increasing its purchases from Russia in recent months. According to some forecasts, Russian coking coal supplies to India could grow by approximately 10% in 2026.
Global coal prices diverge as European market weakens and metallurgical coal strengthens
Global coal prices showed divergent dynamics across key markets this week.
Global coal market saw divergent dynamics: prices fell in Europe; material became more expensive in China; in Australia, thermal coal quotations remained flat, while metallurgical indices strengthened.
On the European coal market, prices corrected below 110 USD/t. Pressure came from a sharp decline in gas and oil quotations following statements by US officials about a possible memorandum of understanding with Iran that would end military action. The parties are engaged in indirect negotiations and a breakthrough is expected soon on the issue of vessels blocked in the Strait of Hormuz.
Coal price upside was also capped by rising renewables and a smaller-than-expected switch to coal, especially amid seasonal demand decline in spring. ARA terminals also have adequate inventory levels, so spot deals were seen infrequently.
Gas quotations on the TTF hub dropped 7% on the week to 545.47 USD/1,000 m3 (-10.50 USD/1,000 m3 w-o-w). EU underground gas storage is 34% full (+2 ppts w-o-w), though below last year’s level of 41%. Stocks at ARA terminals increased over week to 3.00 mio t (+0.19 mio t).
South African High-CV 6,000 rose to 116 USD/t. Market participants noted that traders are opening positions in anticipation of higher demand from industrial buyers in May and June. Meanwhile, truck deliveries of coal to South African ports fell due to rising diesel prices driven by the Middle East conflict.
Glencore’s thermal coal production declined slightly (down 2% y-o-y) to 22.9 mio t in Q1 2026, with output in South Africa virtually unchanged at 3 mio t for the export market and 1.1 mio t for domestic consumers.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao strengthened above 117 USD/t amid forecasts that northern and central China will see temperatures of 35–37°C next week, with average readings over the next ten days 1–3°C above seasonal norms.
However, market activity slowed due to Labor Day holidays. Additionally, reports of price declines have become more frequent in mining regions as consumers hold sufficient inventories. Many buyers warn that FOB price gains may end once coastal power plants complete their restocking.
Coal stocks at 9 major ports stood at 26.90 mio t (+0.70 mio t w-o-w), while inventories at 6 major coastal thermal power plants rose to 12.92 mio t (+0.28 mio t w-o-w).
Indonesian 5,900 GAR strengthened to nearly 95 USD/t, while 4,200 GAR also edged up to 61.6 USD/t. China’s return to active participation in the Asian thermal coal market after the week-long May holidays was marked by renewed interest in Indonesian coal. However, ongoing supply constraints in major producing regions have reduced availability not only of low-CV but also mid- and high-CV material.
Indonesian authorities reiterated plans to cut coal production to around 600 mio t this year from 817 mio t in 2025, amid speculation that the government may revise its budget-focused approach to coal exports. Speaking at the Indonesia Miner 2026 industry event in Jakarta, a government official confirmed the intention to reduce coal output for decarbonization purposes and long-term resource conservation.
Australian High-CV 6,000 remained virtually unchanged at 131 USD/t. Inquiries from China jumped sharply as some consumers prepare for a hotter-than-usual peak summer season.
Global coal prices showed divergent dynamics across key markets this week.
Global coal market saw divergent dynamics: prices fell in Europe; material became more expensive in China; in Australia, thermal coal quotations remained flat, while metallurgical indices strengthened.
On the European coal market, prices corrected below 110 USD/t. Pressure came from a sharp decline in gas and oil quotations following statements by US officials about a possible memorandum of understanding with Iran that would end military action. The parties are engaged in indirect negotiations and a breakthrough is expected soon on the issue of vessels blocked in the Strait of Hormuz.
Coal price upside was also capped by rising renewables and a smaller-than-expected switch to coal, especially amid seasonal demand decline in spring. ARA terminals also have adequate inventory levels, so spot deals were seen infrequently.
Gas quotations on the TTF hub dropped 7% on the week to 545.47 USD/1,000 m3 (-10.50 USD/1,000 m3 w-o-w). EU underground gas storage is 34% full (+2 ppts w-o-w), though below last year’s level of 41%. Stocks at ARA terminals increased over week to 3.00 mio t (+0.19 mio t).
South African High-CV 6,000 rose to 116 USD/t. Market participants noted that traders are opening positions in anticipation of higher demand from industrial buyers in May and June. Meanwhile, truck deliveries of coal to South African ports fell due to rising diesel prices driven by the Middle East conflict.
Glencore’s thermal coal production declined slightly (down 2% y-o-y) to 22.9 mio t in Q1 2026, with output in South Africa virtually unchanged at 3 mio t for the export market and 1.1 mio t for domestic consumers.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao strengthened above 117 USD/t amid forecasts that northern and central China will see temperatures of 35–37°C next week, with average readings over the next ten days 1–3°C above seasonal norms.
However, market activity slowed due to Labor Day holidays. Additionally, reports of price declines have become more frequent in mining regions as consumers hold sufficient inventories. Many buyers warn that FOB price gains may end once coastal power plants complete their restocking.
Coal stocks at 9 major ports stood at 26.90 mio t (+0.70 mio t w-o-w), while inventories at 6 major coastal thermal power plants rose to 12.92 mio t (+0.28 mio t w-o-w).
Indonesian 5,900 GAR strengthened to nearly 95 USD/t, while 4,200 GAR also edged up to 61.6 USD/t. China’s return to active participation in the Asian thermal coal market after the week-long May holidays was marked by renewed interest in Indonesian coal. However, ongoing supply constraints in major producing regions have reduced availability not only of low-CV but also mid- and high-CV material.
Indonesian authorities reiterated plans to cut coal production to around 600 mio t this year from 817 mio t in 2025, amid speculation that the government may revise its budget-focused approach to coal exports. Speaking at the Indonesia Miner 2026 industry event in Jakarta, a government official confirmed the intention to reduce coal output for decarbonization purposes and long-term resource conservation.
Australian High-CV 6,000 remained virtually unchanged at 131 USD/t. Inquiries from China jumped sharply as some consumers prepare for a hotter-than-usual peak summer season.
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Japan coal demand remains resilient as coal-fired power retains major role in 2030 energy mix
Japan coal demand is expected to remain resilient through the next decade, with the latest electricity supply projections indicating coal-fired power could still account for roughly one quarter of Japan’s electricity generation mix in FY2030 despite ongoing decarbonisation efforts.
Current projections indicate coal-fired power could still account for around 25.2% of electricity generation in FY2030 and 22.5% in FY2035, highlighting the slower-than-expected pace of coal phase-outs across the country.
The updated projections also show LNG-fired generation remaining elevated, accounting for more than 30% of the generation mix in both FY2030 and FY2035. Combined, coal and LNG are expected to continue dominating Japan’s electricity system despite rapid renewable energy expansion.
Coal capacity reductions meanwhile remain relatively limited. The figures show that only around 10% of existing coal-fired capacity is currently scheduled for retirement by FY2035, with approximately 45.58 GW of coal-fired generating capacity still expected to remain operational.
Energy security concerns linked to instability in Middle East oil and LNG markets are also reinforcing the role of thermal generation within Japan’s energy strategy. Growing concerns over LNG supply security amid geopolitical tensions are supporting calls to maintain reliable coal-fired generation capacity.
At the same time, renewable energy additions are continuing to accelerate, particularly in solar and wind. However, the pace of renewable deployment alone does not yet appear sufficient to fully displace Japan’s reliance on thermal generation over the next decade.
Japan coal demand is expected to remain resilient through the next decade, with the latest electricity supply projections indicating coal-fired power could still account for roughly one quarter of Japan’s electricity generation mix in FY2030 despite ongoing decarbonisation efforts.
Current projections indicate coal-fired power could still account for around 25.2% of electricity generation in FY2030 and 22.5% in FY2035, highlighting the slower-than-expected pace of coal phase-outs across the country.
The updated projections also show LNG-fired generation remaining elevated, accounting for more than 30% of the generation mix in both FY2030 and FY2035. Combined, coal and LNG are expected to continue dominating Japan’s electricity system despite rapid renewable energy expansion.
Coal capacity reductions meanwhile remain relatively limited. The figures show that only around 10% of existing coal-fired capacity is currently scheduled for retirement by FY2035, with approximately 45.58 GW of coal-fired generating capacity still expected to remain operational.
Energy security concerns linked to instability in Middle East oil and LNG markets are also reinforcing the role of thermal generation within Japan’s energy strategy. Growing concerns over LNG supply security amid geopolitical tensions are supporting calls to maintain reliable coal-fired generation capacity.
At the same time, renewable energy additions are continuing to accelerate, particularly in solar and wind. However, the pace of renewable deployment alone does not yet appear sufficient to fully displace Japan’s reliance on thermal generation over the next decade.
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Urea with Coal Market Overview 2026-2034
The Urea with Coal market represents an innovative intersection of chemical fertilizer production and thermal energy generation, leveraging the synergies between nitrogen-based fertilizers and coal-derived energy sources. This market exists primarily due to the necessity of optimizing resource utilization in regions where coal remains abundant and cost-effective, particularly in emerging economies with significant agricultural and energy demands. The core value proposition hinges on integrating urea synthesis processes with coal combustion or gasification technologies, enabling both fertilizer manufacturing and power generation within a unified supply chain. This dual-purpose approach not only reduces operational costs but also addresses environmental concerns by enabling cleaner coal utilization through advanced gasification techniques that produce syngas, which can be used for urea synthesis. The market's existence is further reinforced by the strategic push toward energy security and agricultural productivity, especially in countries like India, China, and parts of Southeast Asia, where coal remains a dominant energy source and fertilizer demand is surging due to population growth and food security imperatives.
Currently, the market is experiencing a notable acceleration driven by macroeconomic and industry-specific factors. The resurgence of coal-based energy projects, fueled by geopolitical tensions and the desire for energy independence, has created a fertile environment for integrating urea production with coal utilization. Governments in coal-dependent nations are incentivizing such integrations through subsidies, tax benefits, and regulatory frameworks aimed at reducing reliance on imported fertilizers and energy. Additionally, technological advancements in coal gasificationsuch as entrained-flow and fluidized-bed reactorshave enhanced process efficiencies, making co-production more economically viable. The rising costs of natural gas, especially in regions like Europe and North America, are further incentivizing industries to pivot toward coal-based alternatives for both energy and chemical production. This shift is catalyzing a structural transformation in the supply chain, where integrated plants are becoming the new standard for cost competitiveness and environmental compliance.
Value creation in the Urea with Coal market is concentrated around integrated production facilities that combine coal gasification with urea synthesis. These facilities benefit from economies of scale, reduced transportation costs, and the ability to capitalize on by-products such as sulfur and fly ash, which can be monetized or used for environmental mitigation. Control of this market predominantly resides with large industrial conglomerates and state-owned enterprises that have the capital and technological expertise to develop and operate complex integrated plants. Companies like China National Petroleum Corporation (CNPC), Coal India Limited, and Indian Oil Corporation are leading players, leveraging their extensive coal reserves and existing infrastructure. The future of the market is heavily influenced by structural forces such as technological innovation in gasification, tightening environmental regulations, and the geopolitical landscape that affects coal and fertilizer trade flows. These forces are shaping a landscape where adaptability and technological leadership will determine market dominance.
Industry context reveals a dynamic environment characterized by a transition from traditional, standalone fertilizer and energy sectors toward integrated, resource-efficient models. The global push for decarbonization and cleaner coal technologies is prompting investments in advanced gasification and carbon capture utilization and storage (CCUS) systems, which are critical to ensuring that coal-based processes meet evolving environmental standards. Macro drivers include automation and digitalization of plant operations, which improve process control and reduce emissions, as well as regul
The Urea with Coal market represents an innovative intersection of chemical fertilizer production and thermal energy generation, leveraging the synergies between nitrogen-based fertilizers and coal-derived energy sources. This market exists primarily due to the necessity of optimizing resource utilization in regions where coal remains abundant and cost-effective, particularly in emerging economies with significant agricultural and energy demands. The core value proposition hinges on integrating urea synthesis processes with coal combustion or gasification technologies, enabling both fertilizer manufacturing and power generation within a unified supply chain. This dual-purpose approach not only reduces operational costs but also addresses environmental concerns by enabling cleaner coal utilization through advanced gasification techniques that produce syngas, which can be used for urea synthesis. The market's existence is further reinforced by the strategic push toward energy security and agricultural productivity, especially in countries like India, China, and parts of Southeast Asia, where coal remains a dominant energy source and fertilizer demand is surging due to population growth and food security imperatives.
Currently, the market is experiencing a notable acceleration driven by macroeconomic and industry-specific factors. The resurgence of coal-based energy projects, fueled by geopolitical tensions and the desire for energy independence, has created a fertile environment for integrating urea production with coal utilization. Governments in coal-dependent nations are incentivizing such integrations through subsidies, tax benefits, and regulatory frameworks aimed at reducing reliance on imported fertilizers and energy. Additionally, technological advancements in coal gasificationsuch as entrained-flow and fluidized-bed reactorshave enhanced process efficiencies, making co-production more economically viable. The rising costs of natural gas, especially in regions like Europe and North America, are further incentivizing industries to pivot toward coal-based alternatives for both energy and chemical production. This shift is catalyzing a structural transformation in the supply chain, where integrated plants are becoming the new standard for cost competitiveness and environmental compliance.
Value creation in the Urea with Coal market is concentrated around integrated production facilities that combine coal gasification with urea synthesis. These facilities benefit from economies of scale, reduced transportation costs, and the ability to capitalize on by-products such as sulfur and fly ash, which can be monetized or used for environmental mitigation. Control of this market predominantly resides with large industrial conglomerates and state-owned enterprises that have the capital and technological expertise to develop and operate complex integrated plants. Companies like China National Petroleum Corporation (CNPC), Coal India Limited, and Indian Oil Corporation are leading players, leveraging their extensive coal reserves and existing infrastructure. The future of the market is heavily influenced by structural forces such as technological innovation in gasification, tightening environmental regulations, and the geopolitical landscape that affects coal and fertilizer trade flows. These forces are shaping a landscape where adaptability and technological leadership will determine market dominance.
Industry context reveals a dynamic environment characterized by a transition from traditional, standalone fertilizer and energy sectors toward integrated, resource-efficient models. The global push for decarbonization and cleaner coal technologies is prompting investments in advanced gasification and carbon capture utilization and storage (CCUS) systems, which are critical to ensuring that coal-based processes meet evolving environmental standards. Macro drivers include automation and digitalization of plant operations, which improve process control and reduce emissions, as well as regul
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Mexico is seeking to eliminate steel tariffs as part of the USMCA review
The country will also advocate for a regional approach to the automotive industry
Mexico is seeking to have U.S. steel tariffs lifted as part of the review of the USMCA trilateral agreement, according to BNamericas.
On May 27–29, the country’s Ministry of Economy and a delegation from the Office of the U.S. Trade Representative (USTR) discussed issues related to various sectors.
The negotiations are taking place against the backdrop of trade tensions arising from the United States’ imposition of tariffs on Mexican steel and aluminum under Section 232. Currently, a 50% tariff is imposed on both products. Meanwhile, the automotive sector pays a 25% tariff, albeit under preferential mechanisms within the USMCA.
Mexican Economy Minister Marcelo Ebrard emphasized that Mexico’s position will be to insist on the removal of these measures.
Ebrard added that Mexico will advocate for a regional approach to the automotive industry, given the high level of production integration in North America and the rules of origin in effect under the agreement.
The parties will hold additional rounds of trade negotiations in June and July.
As a reminder, in late April of this year, Mexico announced the introduction of a rule requiring all federal construction projects to use steel exclusively from domestic companies.
As reported by GMK Center, last spring the country updated its investment plan, which includes measures aimed at increasing domestic production, particularly steel production, in response to U.S. tariffs. In addition, the country began requiring registration for the import of steel products, which entails companies providing data on the mills from which the imported material originates.
The country will also advocate for a regional approach to the automotive industry
Mexico is seeking to have U.S. steel tariffs lifted as part of the review of the USMCA trilateral agreement, according to BNamericas.
On May 27–29, the country’s Ministry of Economy and a delegation from the Office of the U.S. Trade Representative (USTR) discussed issues related to various sectors.
The negotiations are taking place against the backdrop of trade tensions arising from the United States’ imposition of tariffs on Mexican steel and aluminum under Section 232. Currently, a 50% tariff is imposed on both products. Meanwhile, the automotive sector pays a 25% tariff, albeit under preferential mechanisms within the USMCA.
Mexican Economy Minister Marcelo Ebrard emphasized that Mexico’s position will be to insist on the removal of these measures.
“As for steel and aluminum, the 50% rate seems unacceptable to us; it has no justification whatsoever. We have already spoken about this; it is nothing new,” he told the press.
Ebrard added that Mexico will advocate for a regional approach to the automotive industry, given the high level of production integration in North America and the rules of origin in effect under the agreement.
The parties will hold additional rounds of trade negotiations in June and July.
As a reminder, in late April of this year, Mexico announced the introduction of a rule requiring all federal construction projects to use steel exclusively from domestic companies.
As reported by GMK Center, last spring the country updated its investment plan, which includes measures aimed at increasing domestic production, particularly steel production, in response to U.S. tariffs. In addition, the country began requiring registration for the import of steel products, which entails companies providing data on the mills from which the imported material originates.
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Russian coal exports to South Korea double in Jan–Apr 2026
Russian coal exports to South Korea surged in January–April 2026 as the country increased coal imports amid energy supply risks.
In January–April 2026, South Korea more than doubled its coal imports from Russia to 8.3 mio t (+4.3 mio t or +107.5% vs. Jan–Apr 2025).
South Korea’s total coal imports in January–April 2026 surged to 38.5 mio t (+6.2 mio t or +19.2% vs. Jan–Apr 2025).
Because of the energy crisis in the Middle East, South Korea is lifting the 80% cap on coal-fired power plant capacity utilization and increasing nuclear power plant capacity utilization from the current 65–70% to 80%. With rising prices and supply risks for imported LNG and oil, coal and nuclear power generation are strengthening their positions in the country’s energy mix.
Furthermore, the upcoming El Nino is expected to bring an unusually hot summer with record-breaking demand for electricity. Combined with the need to replenish reserves ahead of winter and ongoing disruptions in global LNG supplies, this will drive South Korea to sharply ramp up its thermal coal imports. Under these conditions, South Korea will likely be forced to import thermal coal in 2026 at volumes significantly exceeding the levels seen in the first four months.
South Korean coal imports (Jan–Apr 2026):
· Australia: 11.9 mio t (+1.8 mio t or +17.8% y-o-y);
· Indonesia: 8.7 mio t (-0.4 mio t or -4.4% y-o-y);
· Russia: 8.3 mio t (+4.3 mio t or +107.5% y-o-y);
· Canada: 3.7 mio t (+1.1 mio t or +42.3% y-o-y);
· South Africa: 2.1 mio t (+0.3 mio t or +16.7% y-o-y);
· Colombia: 2.1 mio t (+0.4 mio t or +23.5% y-o-y);
· USA: 0.9 mio t (-0.9 mio t or -50.0% y-o-y).
Given the crisis in the Russian coal industry, South Korea remains strategically important due to comparatively higher prices than other key markets like China and India.
The unprofitability of Russian coal exports keeps growing because of expensive logistics and a strong ruble. Still, producers are trying to maintain their market share, owing to the quality of their material and expectations of better conditions in the medium term, including stabilization of global prices after they hit rock bottom, as well as the expected correction of the ruble exchange rate.
Russian coal exports to South Korea surged in January–April 2026 as the country increased coal imports amid energy supply risks.
In January–April 2026, South Korea more than doubled its coal imports from Russia to 8.3 mio t (+4.3 mio t or +107.5% vs. Jan–Apr 2025).
South Korea’s total coal imports in January–April 2026 surged to 38.5 mio t (+6.2 mio t or +19.2% vs. Jan–Apr 2025).
Because of the energy crisis in the Middle East, South Korea is lifting the 80% cap on coal-fired power plant capacity utilization and increasing nuclear power plant capacity utilization from the current 65–70% to 80%. With rising prices and supply risks for imported LNG and oil, coal and nuclear power generation are strengthening their positions in the country’s energy mix.
Furthermore, the upcoming El Nino is expected to bring an unusually hot summer with record-breaking demand for electricity. Combined with the need to replenish reserves ahead of winter and ongoing disruptions in global LNG supplies, this will drive South Korea to sharply ramp up its thermal coal imports. Under these conditions, South Korea will likely be forced to import thermal coal in 2026 at volumes significantly exceeding the levels seen in the first four months.
South Korean coal imports (Jan–Apr 2026):
· Australia: 11.9 mio t (+1.8 mio t or +17.8% y-o-y);
· Indonesia: 8.7 mio t (-0.4 mio t or -4.4% y-o-y);
· Russia: 8.3 mio t (+4.3 mio t or +107.5% y-o-y);
· Canada: 3.7 mio t (+1.1 mio t or +42.3% y-o-y);
· South Africa: 2.1 mio t (+0.3 mio t or +16.7% y-o-y);
· Colombia: 2.1 mio t (+0.4 mio t or +23.5% y-o-y);
· USA: 0.9 mio t (-0.9 mio t or -50.0% y-o-y).
Given the crisis in the Russian coal industry, South Korea remains strategically important due to comparatively higher prices than other key markets like China and India.
The unprofitability of Russian coal exports keeps growing because of expensive logistics and a strong ruble. Still, producers are trying to maintain their market share, owing to the quality of their material and expectations of better conditions in the medium term, including stabilization of global prices after they hit rock bottom, as well as the expected correction of the ruble exchange rate.
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Russian coal exports remain unprofitable despite higher global coal prices
The sharp rise in global coal prices, triggered by the Iran-U.S. conflict failed to lift Russian coal exports into profitable territory, as the positive effect was wiped out by the strengthening ruble and annually rising RZD’s railway tariffs, as well as higher freight rates (due to the situation in the Persian Gulf), increased production costs, and other logistics expenses.
Given these circumstances, exports of thermal coal from Kuzbass are unprofitable on all routes, including to the Far East.
Since 2024, the Russian ruble has appreciated by 17%, and considering the exchange rate dynamics in May 2026, when it reached 71.37 RUR/USD (as of May 29, 2026), the appreciation amounted to 23% (the 2024 level is taken as 100%). Such dynamics have an extremely adverse effect on Russian coal companies on the back of rising production costs and increased expenses for rail transportation of coal.
Even with higher global prices, the strong ruble and rising domestic rail tariffs have put the industry on the brink of bankruptcy.
Coal producers continue to bear fixed costs for mining, maintenance and wages. Idling production would often result in even larger losses than exporting at a loss.
Russian Ministry of energy has warned that the sector’s losses could reach 8.1 billion USD in 2026 if current negative trends persist.
Industry representatives have been calling for a reduction in RZD’s rail tariffs, which they say have become a critical factor, artificially inflating costs.
For Russian coal exports to become profitable, it is necessary not only for the ruble to weaken and global prices to rise, but, above all, for Russian Railways to lower its tariffs.
The sharp rise in global coal prices, triggered by the Iran-U.S. conflict failed to lift Russian coal exports into profitable territory, as the positive effect was wiped out by the strengthening ruble and annually rising RZD’s railway tariffs, as well as higher freight rates (due to the situation in the Persian Gulf), increased production costs, and other logistics expenses.
Given these circumstances, exports of thermal coal from Kuzbass are unprofitable on all routes, including to the Far East.
Since 2024, the Russian ruble has appreciated by 17%, and considering the exchange rate dynamics in May 2026, when it reached 71.37 RUR/USD (as of May 29, 2026), the appreciation amounted to 23% (the 2024 level is taken as 100%). Such dynamics have an extremely adverse effect on Russian coal companies on the back of rising production costs and increased expenses for rail transportation of coal.
Even with higher global prices, the strong ruble and rising domestic rail tariffs have put the industry on the brink of bankruptcy.
Coal producers continue to bear fixed costs for mining, maintenance and wages. Idling production would often result in even larger losses than exporting at a loss.
Russian Ministry of energy has warned that the sector’s losses could reach 8.1 billion USD in 2026 if current negative trends persist.
Industry representatives have been calling for a reduction in RZD’s rail tariffs, which they say have become a critical factor, artificially inflating costs.
For Russian coal exports to become profitable, it is necessary not only for the ruble to weaken and global prices to rise, but, above all, for Russian Railways to lower its tariffs.
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Global coal prices rise on stronger European, Chinese and Australian markets
Global coal prices continued to rise over the past week across Europe, China, Indonesia, and Australia.
Over the past week, the upward trend in the coal market continued: indices rose in Europe; coal became more expensive in China, following the May 22 tragedy; in Australia, prices strengthened for both thermal and metallurgical material.
In the European coal market, spot quotations continued their advance to 128 USD/t. Supportive factors included expectations of higher solid fuel demand during the summer amid gas price volatility, stemming from uncertainty over the US-Iran crisis; physical market deals continued by a major international trader (two deals were recorded this week at 124 and 127 USD/t DES ARA for June delivery); and the Indonesian government’s plans to take control of coal export shipments.
Gas market in Europe remained highly volatile due to periodic exchanges of strikes between the US and Iran despite a previously announced truce, as well as news that Tehran had received an unofficial draft memorandum of understanding with the US under which Iran would commit within a month to restoring commercial shipping through the Strait of Hormuz to pre-war levels, while the US would lift its naval blockade.
Gas quotations on the TTF hub stood at 563.84 USD/1,000 m3 (-8.72 USD/1,000 m3 w-o-w). EU underground gas storage increased to 38.8% (+2.1 ppts w-o-w).
South African High-CV 6,000 corrected below 120 USD/t, continuing to hover near its highest levels in 2.5 years. Indices continue to find support from news of Indonesia’s plan to nationalize coal exports. Traditional buyers of Indonesian material may potentially shift to other supply sources. South African 4,800 NAR coal, in particular, competes with Indonesian coal in the key Indian market.
In India, thermal coal buyers continue to shun imports. Several sponge iron producers stated that a sharp drop in their product prices has made imported material somewhat unprofitable, prompting them to gradually scale back purchase volumes.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao rose to 124 USD/t. Coal mining regions in China have stepped up safety inspections following a gas explosion on May 22 at the Liushenyu coal mine (metallurgical coal mine with 1.2 mio t/year capacity) in Shanxi province, which killed 82 people, left two missing, and injured 128.
The government ordered at least 118 enterprises in Shanxi province with total capacity of 134.5 mio t/year, mostly producing metallurgical coal, to suspend operations for safety checks. Similar suspensions and inspections followed in Shaanxi and Inner Mongolia. Experts estimate that China’s production could decline by 10-15 mio t in June alone. For the full year, coal output could fall 1-2% compared with the 4.83 billion tons mined last year, largely due to a 5-10% drop in coking coal production.
The thermal coal market is not expected to be impacted to the same extent, as China’s central government will continue its policy of ensuring adequate supply during the summer. Thus, the current price rally is likely to be short-lived: most suspended mines are expected to resume operations next week.
Coal stocks at 9 major ports increased to 28.32 mio t (+0.80 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 13.44 mio t (+0.58 mio t w-o-w).
Indonesian 5,900 GAR climbed to 107 USD/t, while the price of 4,200 GAR strengthened to nearly 65 USD/t. Demand for Indonesian material is rising from Chinese consumers amid tighter safety inspections following the May 22 tragedy in Shanxi.
Market participants continue to analyze Indonesia’s plans to create a state body that will control all coal exports. According to a briefing by Indonesian authorities on May 26, exporters will be able to continue their normal activities from June 1 but must report deals to Danantara Sumber Daya Indonesia (DSI), providing the organization with all documentation, financial data, and counterparty information. From J
Global coal prices continued to rise over the past week across Europe, China, Indonesia, and Australia.
Over the past week, the upward trend in the coal market continued: indices rose in Europe; coal became more expensive in China, following the May 22 tragedy; in Australia, prices strengthened for both thermal and metallurgical material.
In the European coal market, spot quotations continued their advance to 128 USD/t. Supportive factors included expectations of higher solid fuel demand during the summer amid gas price volatility, stemming from uncertainty over the US-Iran crisis; physical market deals continued by a major international trader (two deals were recorded this week at 124 and 127 USD/t DES ARA for June delivery); and the Indonesian government’s plans to take control of coal export shipments.
Gas market in Europe remained highly volatile due to periodic exchanges of strikes between the US and Iran despite a previously announced truce, as well as news that Tehran had received an unofficial draft memorandum of understanding with the US under which Iran would commit within a month to restoring commercial shipping through the Strait of Hormuz to pre-war levels, while the US would lift its naval blockade.
Gas quotations on the TTF hub stood at 563.84 USD/1,000 m3 (-8.72 USD/1,000 m3 w-o-w). EU underground gas storage increased to 38.8% (+2.1 ppts w-o-w).
South African High-CV 6,000 corrected below 120 USD/t, continuing to hover near its highest levels in 2.5 years. Indices continue to find support from news of Indonesia’s plan to nationalize coal exports. Traditional buyers of Indonesian material may potentially shift to other supply sources. South African 4,800 NAR coal, in particular, competes with Indonesian coal in the key Indian market.
In India, thermal coal buyers continue to shun imports. Several sponge iron producers stated that a sharp drop in their product prices has made imported material somewhat unprofitable, prompting them to gradually scale back purchase volumes.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao rose to 124 USD/t. Coal mining regions in China have stepped up safety inspections following a gas explosion on May 22 at the Liushenyu coal mine (metallurgical coal mine with 1.2 mio t/year capacity) in Shanxi province, which killed 82 people, left two missing, and injured 128.
The government ordered at least 118 enterprises in Shanxi province with total capacity of 134.5 mio t/year, mostly producing metallurgical coal, to suspend operations for safety checks. Similar suspensions and inspections followed in Shaanxi and Inner Mongolia. Experts estimate that China’s production could decline by 10-15 mio t in June alone. For the full year, coal output could fall 1-2% compared with the 4.83 billion tons mined last year, largely due to a 5-10% drop in coking coal production.
The thermal coal market is not expected to be impacted to the same extent, as China’s central government will continue its policy of ensuring adequate supply during the summer. Thus, the current price rally is likely to be short-lived: most suspended mines are expected to resume operations next week.
Coal stocks at 9 major ports increased to 28.32 mio t (+0.80 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 13.44 mio t (+0.58 mio t w-o-w).
Indonesian 5,900 GAR climbed to 107 USD/t, while the price of 4,200 GAR strengthened to nearly 65 USD/t. Demand for Indonesian material is rising from Chinese consumers amid tighter safety inspections following the May 22 tragedy in Shanxi.
Market participants continue to analyze Indonesia’s plans to create a state body that will control all coal exports. According to a briefing by Indonesian authorities on May 26, exporters will be able to continue their normal activities from June 1 but must report deals to Danantara Sumber Daya Indonesia (DSI), providing the organization with all documentation, financial data, and counterparty information. From J
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Net losses of Russian coal companies in January-March 2026, according to preliminary data, amounted to 1.1 bln USD, up 0.2 bln USD or 20% y-o-y. The share of unprofitable companies reached 63%, compared to 61% a year earlier. 62 enterprises remain in the red zone, of which 20 have already stopped mining, while the rest are on the verge of halting operations.
Companies’ performance is deteriorating due to several negative factors, including transportation costs, as Russian Railways (RZD) raises tariffs: in 2025, the increase spiked 13.8% (despite official inflation of 5.6%), and in March 2026, a 1% surcharge was introduced, in January 2027 the tariff will be raised by 8%, with further indexation expected.
In addition, the ruble was strengthening again, and bank interest rates remained high, placing significant pressure on coal producers and exporters, while also increasing the debt burden. Debt burden by the end of 2025 reached 18 bln USD (+5.1 bln USD or 40% y-o-y).
Despite this, the government does not plan to extend the deferment on mineral extraction tax (MET) and insurance premium payments beyond April 2026. In this regard, the Ministry of Energy forecasts that losses of Russian coal enterprises will rise to 7 bln USD in 2026, which is 27% higher than in 2025.
Thus, in 2026, the negative trend in the Russian coal industry is intensifying amid rising production costs and ruble appreciation. Additional factors continuing to adversely affect coal companies’ financial results include high rail tariffs and limited rail infrastructure capacity on the Eastern range. Due to Western sanctions, the list of countries available for Russian coal exports remains limited.
Companies’ performance is deteriorating due to several negative factors, including transportation costs, as Russian Railways (RZD) raises tariffs: in 2025, the increase spiked 13.8% (despite official inflation of 5.6%), and in March 2026, a 1% surcharge was introduced, in January 2027 the tariff will be raised by 8%, with further indexation expected.
In addition, the ruble was strengthening again, and bank interest rates remained high, placing significant pressure on coal producers and exporters, while also increasing the debt burden. Debt burden by the end of 2025 reached 18 bln USD (+5.1 bln USD or 40% y-o-y).
Despite this, the government does not plan to extend the deferment on mineral extraction tax (MET) and insurance premium payments beyond April 2026. In this regard, the Ministry of Energy forecasts that losses of Russian coal enterprises will rise to 7 bln USD in 2026, which is 27% higher than in 2025.
Thus, in 2026, the negative trend in the Russian coal industry is intensifying amid rising production costs and ruble appreciation. Additional factors continuing to adversely affect coal companies’ financial results include high rail tariffs and limited rail infrastructure capacity on the Eastern range. Due to Western sanctions, the list of countries available for Russian coal exports remains limited.
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US coal production remained largely unchanged in the week ended May 23, 2026, with output slightly above the previous week but marginally below levels recorded a year earlier.
Year-to-date production continues to track close to 2025 levels despite ongoing market uncertainty.
Estimated US coal production totalled approximately 9.6 million short tons (MMst) in the week ended May 23, 2026, according to the latest data from the US Energy Information Administration (EIA).
US coal production trends by region 20252026
Production was 0.4% higher than the previous week’s estimate, but 0.7% lower than the comparable week in 2025.
Coal production east of the Mississippi River totalled 4.1 MMst, while production west of the Mississippi River reached 5.5 MMst.
On a year-to-date basis, US coal production stood at 205.7 MMst, which is 0.5% below the comparable period in 2025, indicating that overall output remains relatively stable despite regional fluctuations.
The EIA data shows western coal-producing regions continue to account for the largest share of US coal output, while Appalachian and Interior basin production has remained broadly steady over the past 12 months.
Year-to-date production continues to track close to 2025 levels despite ongoing market uncertainty.
Estimated US coal production totalled approximately 9.6 million short tons (MMst) in the week ended May 23, 2026, according to the latest data from the US Energy Information Administration (EIA).
US coal production trends by region 20252026
Production was 0.4% higher than the previous week’s estimate, but 0.7% lower than the comparable week in 2025.
Coal production east of the Mississippi River totalled 4.1 MMst, while production west of the Mississippi River reached 5.5 MMst.
On a year-to-date basis, US coal production stood at 205.7 MMst, which is 0.5% below the comparable period in 2025, indicating that overall output remains relatively stable despite regional fluctuations.
The EIA data shows western coal-producing regions continue to account for the largest share of US coal output, while Appalachian and Interior basin production has remained broadly steady over the past 12 months.
Global coal prices continued to rise over the past week across Europe, China, Indonesia, and Australia.
Over the past week, the upward trend in the coal market continued: indices rose in Europe; coal became more expensive in China, following the May 22 tragedy; in Australia, prices strengthened for both thermal and metallurgical material.
In the European coal market, spot quotations continued their advance to 128 USD/t. Supportive factors included expectations of higher solid fuel demand during the summer amid gas price volatility, stemming from uncertainty over the US-Iran crisis; physical market deals continued by a major international trader (two deals were recorded this week at 124 and 127 USD/t DES ARA for June delivery); and the Indonesian government’s plans to take control of coal export shipments.
Gas market in Europe remained highly volatile due to periodic exchanges of strikes between the US and Iran despite a previously announced truce, as well as news that Tehran had received an unofficial draft memorandum of understanding with the US under which Iran would commit within a month to restoring commercial shipping through the Strait of Hormuz to pre-war levels, while the US would lift its naval blockade.
Gas quotations on the TTF hub stood at 563.84 USD/1,000 m3 (-8.72 USD/1,000 m3 w-o-w). EU underground gas storage increased to 38.8% (+2.1 ppts w-o-w).
South African High-CV 6,000 corrected below 120 USD/t, continuing to hover near its highest levels in 2.5 years. Indices continue to find support from news of Indonesia’s plan to nationalize coal exports. Traditional buyers of Indonesian material may potentially shift to other supply sources. South African 4,800 NAR coal, in particular, competes with Indonesian coal in the key Indian market.
In India, thermal coal buyers continue to shun imports. Several sponge iron producers stated that a sharp drop in their product prices has made imported material somewhat unprofitable, prompting them to gradually scale back purchase volumes.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao rose to 124 USD/t. Coal mining regions in China have stepped up safety inspections following a gas explosion on May 22 at the Liushenyu coal mine (metallurgical coal mine with 1.2 mio t/year capacity) in Shanxi province, which killed 82 people, left two missing, and injured 128.
The government ordered at least 118 enterprises in Shanxi province with total capacity of 134.5 mio t/year, mostly producing metallurgical coal, to suspend operations for safety checks. Similar suspensions and inspections followed in Shaanxi and Inner Mongolia. Experts estimate that China’s production could decline by 10-15 mio t in June alone. For the full year, coal output could fall 1-2% compared with the 4.83 billion tons mined last year, largely due to a 5-10% drop in coking coal production.
The thermal coal market is not expected to be impacted to the same extent, as China’s central government will continue its policy of ensuring adequate supply during the summer. Thus, the current price rally is likely to be short-lived: most suspended mines are expected to resume operations next week.
Coal stocks at 9 major ports increased to 28.32 mio t (+0.80 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 13.44 mio t (+0.58 mio t w-o-w).
Indonesian 5,900 GAR climbed to 107 USD/t, while the price of 4,200 GAR strengthened to nearly 65 USD/t. Demand for Indonesian material is rising from Chinese consumers amid tighter safety inspections following the May 22 tragedy in Shanxi.
Market participants continue to analyze Indonesia’s plans to create a state body that will control all coal exports. According to a briefing by Indonesian authorities on May 26, exporters will be able to continue their normal activities from June 1 but must report deals to Danantara Sumber Daya Indonesia (DSI), providing the organization with all documentation, financial data, and counterparty information. From January 01, 2027, DSI is expected to take over as the official exporter for con
Over the past week, the upward trend in the coal market continued: indices rose in Europe; coal became more expensive in China, following the May 22 tragedy; in Australia, prices strengthened for both thermal and metallurgical material.
In the European coal market, spot quotations continued their advance to 128 USD/t. Supportive factors included expectations of higher solid fuel demand during the summer amid gas price volatility, stemming from uncertainty over the US-Iran crisis; physical market deals continued by a major international trader (two deals were recorded this week at 124 and 127 USD/t DES ARA for June delivery); and the Indonesian government’s plans to take control of coal export shipments.
Gas market in Europe remained highly volatile due to periodic exchanges of strikes between the US and Iran despite a previously announced truce, as well as news that Tehran had received an unofficial draft memorandum of understanding with the US under which Iran would commit within a month to restoring commercial shipping through the Strait of Hormuz to pre-war levels, while the US would lift its naval blockade.
Gas quotations on the TTF hub stood at 563.84 USD/1,000 m3 (-8.72 USD/1,000 m3 w-o-w). EU underground gas storage increased to 38.8% (+2.1 ppts w-o-w).
South African High-CV 6,000 corrected below 120 USD/t, continuing to hover near its highest levels in 2.5 years. Indices continue to find support from news of Indonesia’s plan to nationalize coal exports. Traditional buyers of Indonesian material may potentially shift to other supply sources. South African 4,800 NAR coal, in particular, competes with Indonesian coal in the key Indian market.
In India, thermal coal buyers continue to shun imports. Several sponge iron producers stated that a sharp drop in their product prices has made imported material somewhat unprofitable, prompting them to gradually scale back purchase volumes.
In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao rose to 124 USD/t. Coal mining regions in China have stepped up safety inspections following a gas explosion on May 22 at the Liushenyu coal mine (metallurgical coal mine with 1.2 mio t/year capacity) in Shanxi province, which killed 82 people, left two missing, and injured 128.
The government ordered at least 118 enterprises in Shanxi province with total capacity of 134.5 mio t/year, mostly producing metallurgical coal, to suspend operations for safety checks. Similar suspensions and inspections followed in Shaanxi and Inner Mongolia. Experts estimate that China’s production could decline by 10-15 mio t in June alone. For the full year, coal output could fall 1-2% compared with the 4.83 billion tons mined last year, largely due to a 5-10% drop in coking coal production.
The thermal coal market is not expected to be impacted to the same extent, as China’s central government will continue its policy of ensuring adequate supply during the summer. Thus, the current price rally is likely to be short-lived: most suspended mines are expected to resume operations next week.
Coal stocks at 9 major ports increased to 28.32 mio t (+0.80 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 13.44 mio t (+0.58 mio t w-o-w).
Indonesian 5,900 GAR climbed to 107 USD/t, while the price of 4,200 GAR strengthened to nearly 65 USD/t. Demand for Indonesian material is rising from Chinese consumers amid tighter safety inspections following the May 22 tragedy in Shanxi.
Market participants continue to analyze Indonesia’s plans to create a state body that will control all coal exports. According to a briefing by Indonesian authorities on May 26, exporters will be able to continue their normal activities from June 1 but must report deals to Danantara Sumber Daya Indonesia (DSI), providing the organization with all documentation, financial data, and counterparty information. From January 01, 2027, DSI is expected to take over as the official exporter for con
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Indonesian coal demand has surged to a record monthly high even as the government attempts to curb domestic coal production.
New data suggests growing demand from smelters, power generation and downstream processing industries is tightening the domestic market and reshaping coal flows across the country
Indonesia is recording its highest-ever monthly coal discharge volume, highlighting the growing strength of domestic coal demand despite government efforts to reduce production.
According to DBX Commodities, coal discharge volumes reached 3,203 kT in May 2026, representing an all-time high and standing 163% above the five-year seasonal average.
The trend comes as Jakarta seeks to reduce coal output to approximately 600 million tonnes in 2026, around 24% below last year’s production levels, in an effort to support coal prices following a period of oversupply.
However, domestic demand is expanding rapidly. Coal consumers that are unable to secure sufficient local supply are increasingly competing for available volumes, while growing industrial activity continues to lift consumption.
A key driver is Indonesia’s downstream minerals strategy. The country’s 2020 nickel ore export ban triggered significant investment in domestic smelting capacity, creating a growing appetite for coal. Nickel and metals processing operations now account for an estimated 31% of domestic coal consumption, with additional demand expected from ongoing industrial expansion and power sector growth.
The result is a striking contradiction. While authorities are attempting to restrict supply to support export prices, rising domestic demand is simultaneously pushing coal volumes through the local market at record levels.
The latest data highlights the increasing importance of Indonesia’s industrial sector in shaping coal demand trends and suggests that domestic consumption could become an even more significant factor in the country’s coal market over the coming years.
New data suggests growing demand from smelters, power generation and downstream processing industries is tightening the domestic market and reshaping coal flows across the country
Indonesia is recording its highest-ever monthly coal discharge volume, highlighting the growing strength of domestic coal demand despite government efforts to reduce production.
According to DBX Commodities, coal discharge volumes reached 3,203 kT in May 2026, representing an all-time high and standing 163% above the five-year seasonal average.
The trend comes as Jakarta seeks to reduce coal output to approximately 600 million tonnes in 2026, around 24% below last year’s production levels, in an effort to support coal prices following a period of oversupply.
However, domestic demand is expanding rapidly. Coal consumers that are unable to secure sufficient local supply are increasingly competing for available volumes, while growing industrial activity continues to lift consumption.
A key driver is Indonesia’s downstream minerals strategy. The country’s 2020 nickel ore export ban triggered significant investment in domestic smelting capacity, creating a growing appetite for coal. Nickel and metals processing operations now account for an estimated 31% of domestic coal consumption, with additional demand expected from ongoing industrial expansion and power sector growth.
The result is a striking contradiction. While authorities are attempting to restrict supply to support export prices, rising domestic demand is simultaneously pushing coal volumes through the local market at record levels.
The latest data highlights the increasing importance of Indonesia’s industrial sector in shaping coal demand trends and suggests that domestic consumption could become an even more significant factor in the country’s coal market over the coming years.
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