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.

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.

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.

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.

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.

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

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.

“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.

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 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.

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

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.

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.

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

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.

Asian coal demand is set to increase sharply as LNG supply disruptions and higher gas prices force utilities across the region to rely more heavily on coal-fired generation. While many countries remain committed to long-term energy transition goals, the latest market analysis suggests coal continues to play a critical role when energy security comes under pressure.
According to new research by Rystad Energy, Asia-Pacific thermal coal consumption could increase significantly over the remainder of the decade, with around half of the additional demand expected to occur in 2026 alone. The increase is being driven by tighter LNG markets following damage to Gulf energy infrastructure and the resulting reduction in LNG exports to Asia.

The analysis estimates that LNG supply disruptions could leave Asia facing a gas shortfall of around 35 million tonnes this year. As utilities seek alternative sources of power generation, existing coal-fired plants are being dispatched more frequently, particularly in gas-dependent economies across Northeast and Southeast Asia.

The report argues that the shift is not the result of a broader policy reversal or a renewed wave of coal investment. Instead, it reflects the practical realities of maintaining reliable electricity supplies when gas markets become constrained. In several countries, regulatory limits on coal plant utilisation have been relaxed, allowing operators to increase output from existing assets.
Japan, South Korea and Taiwan are expected to account for a significant share of the additional coal demand, while Vietnam, Thailand and the Philippines are also projected to increase coal consumption as utilities respond to tighter gas balances. China is expected to remain comparatively insulated due to the relatively limited role of gas in its power sector.
The findings reinforce a theme that has emerged repeatedly during recent energy market disruptions: coal remains an important backstop for electricity systems when alternative fuel supplies become unavailable or prohibitively expensive. While renewable capacity continues to expand across Asia, the report notes that coal is still frequently called upon to support power systems during periods of market stress.

For coal producers and traders, the key question will be whether the current increase in demand remains a temporary response to LNG market disruption or evolves into a longer-lasting shift in fuel consumption patterns. For now, the evidence suggests the market response is being driven by energy security concerns rather than any fundamental change in long-term policy direction.

Global coal prices declined over the past week amid weaker sentiment across major coal markets.

Negative sentiment prevailed in the coal market over the past week: indices in Europe declined significantly; coal in China remained unchanged; in Australia, high-CV thermal and metallurgical coal became cheaper.

In the European coal market, the downward movement intensified over the past week. Quotations fell below 118 USD/t. Pressure on coal came from a sharp drop in gas and oil prices of nearly 20% following the announcement of a US-Iran agreement with the signing of a memorandum of understanding that allowed for the unblocking of the Strait of Hormuz. The deal helped ease concerns over potential energy supply disruptions, though the US president warned that military action could resume if Iran fails to meet its commitments.

Gas quotations on the TTF hub fell to 487.14 USD/1,000 m3 (-73.63 USD/1,000 m3 w-o-w). EU underground gas storage increased to 45% (+2 ppts w-o-w), notably below last year’s level of 53%.

South African High-CV 6,000 dropped below 108 USD/t, following European quotations. Market participants refrained from trading amid volatility. Interest in South African coal from India remained limited due to weak sponge iron prices over the past six weeks. Meanwhile, rail deliveries of coal for export were recovering after Transnet completed repairs on rail lines damaged on June 8 by a derailment. Both lines were reopened late last week.

Exports through the RBCT terminal in May rose 13% month-on-month. However, June volumes are expected to be lower due to the derailment. Rail deliveries were suspended for approximately four days, causing deliveries to the RBCT terminal to fall significantly below the norm (1 mio t per week). Still, RBCT could ship around 62 mio t for export for the full year (+7.5% vs. 2025), exceeding the 60 mio t target.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao remained flat at 127 USD/t due to persistent buyer resistance to higher prices, which led to reduced activity and limited transactions, although suppliers remained confident about mid-summer demand.

Under long-term thermal coal contracts, daily consumption and procurement volumes continued to rise alongside higher generation loads. Overall, trader sentiment was mixed. Some participants maintained high price expectations, supported by tightening supply at the mining level and expectations of peak seasonal demand. Conversely, others were increasingly inclined to sell due to rising inventories, sufficient availability of prompt-delivery import cargoes, and falling import coal prices.

On June 15, Chinese authorities mandated that nine key coal-consuming sectors (power generators, steel, aluminum, cement producers, etc.) carry out upgrades in 2026–2028 to improve energy efficiency by an average of 20%. The goal is to reduce coal consumption by 100 mio t/year and cut CO₂ emissions. Inefficient capacity is expected to be phased out gradually.

Coal stocks at 9 major ports edged down to 28.33 mio t (-0.11 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 13.97 mio t (+0.24 mio t w-o-w).

Indonesian 5,900 GAR rose above 109 USD/t, while the price of 4,200 GAR strengthened to nearly 67.5 USD/t. Demand for Indonesian material from Chinese consumers is rising amid tighter safety inspections, following the May 22 tragedy in Shanxi.

The upward trend in Indonesian material quotations continues. However, price gains are slowing alongside demand in India and China, where coal supply and inventory levels are high.

Indonesian coal exports recovered over the past week thanks to increased shipments to India and other countries, while exports to China remained broadly stable. Loading in Kalimantan and Sumatra also remained relatively smooth. Preliminary data shows exports reached 8.8 mio t (+14% w-o-w and +6% y-o-y), above the 24-week average of 8.4 mio t. In the first 24 weeks of 2026, Indonesia shipped 202 mio t of coal (-18 mio t or -8% y-o-y).

Australian High-CV 6,000 fell to 141 USD/t, retr

Kuzbass coal production declined in January-May 2026 amid rising losses and logistics pressure.

Under the Ministry of Coal Industry of Kuzbass, in January-May 2026, coal mining enterprises in Kuzbass produced 77.7 mio t (-4.1 mio t or -5.0% vs. Jan-May 2025).

Export supplies from Kuzbass in January-May 2026 totaled 45.5 mio t (+1.9 mio t or +4.4% vs. Jan-May 2025).

The fall in global prices, coupled with a rise in production costs and logistics expenses, resulted in increased losses. 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.

The crisis in the coal industry, on the back of sanctions, high railway tariffs, firming ruble as well as rising costs and logistical constraints, will further adversely affect the production and supplies of high-quality Russian coal to the global market in 2026.

In its latest metallurgical coal market update, McCloskey highlighted how developments in China drove sharp swings in both futures and physical markets, prompting renewed interest in seaborne supply and supporting higher prices for premium hard coking coal.

McCloskey reported that its assessment for low-volatile coal MCC1 rose by $3.60/t on the week to $243.00/t FOB Australia, while MCC4 increased by $18.15/t to $261.15/t CFR China. Market direction was heavily influenced by developments in China, where Dalian Commodity Exchange coking coal futures initially weakened before rebounding later in the week.

Early pressure came after participants interpreted comments from Shaanxi province on securing summer coal supply as a possible signal of broader coal output support. However, traders later noted that Shaanxi is mainly a thermal coal-producing province, while domestic prime hard low-volatile coking coal supply remained tight. As sentiment softened, offers became limited and traders adopted a wait-and-see approach rather than selling cargoes aggressively.

The market then regained momentum after participants shared reports of a mining accident at a premium low-volatile operation in Shanxi. Although no official confirmation had been issued at the time of reporting, the news increased Chinese interest in seaborne premium hard coking coal. Buyers were understood to favour on-the-water or nearby loading cargoes, reflecting concern over domestic availability and uncertainty around future production recovery.

In the secondary market, six Panamax cargoes of prime hard material were understood to be available, including premium low-volatile and premium mid-volatile brands for late-June and July loading. Chinese buyers were reportedly open to negotiations around $265.00/t CFR China for Australian material, though laycan timing remained a key factor.

Domestic Chinese prices also strengthened, with Shanxi Anze premium low-sulphur coal rising to RMB1,980/t ex-plant including VAT. Stricter safety inspections in parts of Shanxi supported broader price gains, while some East China steelmakers faced reduced deliveries of term-contracted coal and turned to spot supply.

At the same time, buying interest for second-tier coals was limited by futures corrections and continued strong Mongolian supply. In the Atlantic basin, demand remained mixed, with some interest from South America and China for Colombian mid-vol coal, while European prompt demand stayed subdued amid logistics constraints and weaker steel production.

Global coal prices showed mixed dynamics over the past week, with European indices continuing to recover, Chinese coal prices softening, Indonesian coal facing weak demand, and Australian thermal coal moving lower.

Mixed dynamics persisted in the coal market over the past week: indices in Europe edged higher; coal in China became cheaper; in Australia, thermal material prices fell, while metallurgical coal quotations showed divergent movements.

In the European coal market, the recovery continued with quotations climbing to 124 USD/t. Coal found support from above-normal temperatures in Europe, which reduced nuclear generation as warming river waters limited cooling capacity for reactors, while electricity prices climbed to multi-month highs due to air conditioning loads. Further temperature increases are forecast for next week.

German electricity prices rose to an average of 158 EUR/MWh, compared with 147.31 EUR/MWh last week. Renewables accounted for 56% of the mix versus 65% a week earlier, while the share of fossil fuels rose from 34% to 44%. Margins for both coal and gas-fired power plants remained positive and increased over the past week.

Gas quotations on the TTF hub, amid the heatwave and exchanges of strikes between the US and Iran, rose over the week to 523.79 USD/1,000 m3 (+46.70 USD/1,000 m3 w-o-w). EU underground gas storage rose to 49% (+2 ppts w-o-w), 10 ppts below last year’s level of 59%. Coal stocks at ARA terminals edged up to 3.93 mio t (+0.04 mio t w-o-w), as low water levels on sections of the Rhine River constrained inland logistics and reduced barge capacity by more than half.

South African High-CV 6,000 rose following the European market to 107-108 USD/t. Mid-CV material hit a 4-month low, falling below 88 USD/t, as demand from Indian DRI (sponge iron) producers — historically among the most important buyers of South African mid-CV coal — weakened due to high costs, rupee depreciation, and improved availability of domestic coal in India.

In China, spot prices for 5,500 NAR coal at the port of Qinhuangdao fell to 124 USD/t, driven by rising inventories at power plants and ports, slower trading activity, and falling import prices. Power plants are well-supplied with coal through long-term contracts and imports, while consumption remains relatively low due to cool weather and high hydropower output. This suggests the potential for significant price gains may be far lower than previously expected, barring an extremely hot spell.

According to the five-year energy sector development plan for 2026–2030 published this week, China aims to build a low-carbon energy system that is reliable and efficient. Coal and oil demand is expected to peak within the next five years, after which they will gradually transition to backup energy sources.

Coal stocks at 9 major ports increased to 28.83 mio t (+0.37 mio t w-o-w), while inventories at 6 major coastal thermal power plants stood at 14.71 mio t (+0.39 mio t w-o-w).

Indonesian 5,900 GAR fell to 107 USD/t, while the price of 4,200 GAR dropped below 65 USD/t, reflecting high inventories in China and persistent rainy weather that did not support active import shipments during the peak summer season.

Indonesian-origin coal is being offered at a premium and is meeting resistance from Chinese and Indian buyers due to ample inventories (physical market deals remain limited), so further downside correction is possible to attract buyers. Some Chinese utilities are even delaying spot purchases for July-August in anticipation of lower prices. Demand from Vietnam also proved limited.

Indonesia raised its thermal coal reference prices (HBA index) across all grades for the first half of July for the sixth consecutive time, despite weakening demand.

Australian High-CV 6,000 fell to 129 USD/t amid easing geopolitical tensions, prompting buyers to adopt a wait-and-see stance. Most inquiries from China came in at discounts or at market prices.

Australia’s HCC metallurgical coal index rose to 244 USD/t, supported by renewed buyer interest, though sentiment remained wea

PJM electricity generation during the first major U.S. heat wave of summer 2026 relied overwhelmingly on dispatchable power sources, with coal and natural gas providing the additional generation needed as electricity demand surged to near-record levels.

The first major heat wave of the 2026 U.S. summer pushed electricity demand across the PJM Interconnection close to record levels, providing another real-world test of how one of the world’s largest electricity markets responds under extreme conditions.

Serving around 67 million people across 13 states and the District of Columbia, PJM recorded demand approaching 160 GW, with a preliminary peak of around 163 GW on 2 July—just below the system’s all-time record set during the 2006 heat wave.

The data shows that dispatchable generation carried almost all of the additional load.
According to the analysis, nuclear, coal and natural gas together supplied around 88% of total generation during the heat wave. Natural gas averaged approximately 55 GW, while coal ave

Russian coal exports are gaining support from South Korean demand as the country increases coal and nuclear power generation.

In January–May 2026, South Korea doubled its coal imports from Russia to 10.2 mio t (+5.0 mio t or +96.2% vs. Jan–May 2025).

South Korea’s total coal imports in January–May 2026 surged to 46.8 mio t (+7.6 mio t or +19.4% vs. Jan–May 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, 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 five months.

South Korean coal imports (Jan–May 2026):

· Australia: 15.3 mio t (+3.0 mio t or +24.4% y-o-y);
· Russia: 10.2 mio t (+5.0 mio t or +96.2% y-o-y);
· Indonesia: 10.1 mio t (-0.2 mio t or -1.9% y-o-y);
· Canada: 4.6 mio t (+1.1 mio t or +31.4% y-o-y);
· South Africa: 2.3 mio t (+0.3 mio t or +15.0% y-o-y);
· Colombia: 2.1 mio t (-0.3 mio t or -12.5% y-o-y);
· USA: 1.1 mio t (-1.0 mio t or -47.6% 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.