The international thermal coal market experienced tepid supply and demand last week, with prices drifting lower in the absence of supportive drivers.

Indonesia faced supply constraints due to rainfall and production quotas, while South Africa grappled with tighter supplies as the year-end approaches. Coal supply from Australia and Russia remained relatively stable.

Home heating demand during winter in Europe provided some support for coal consumption. Demand from key Asian import markets, particularly China and India, remained weak. High inventories, mild weather, and sluggish industrial demand dampened purchasing interest, leading to a cautious market outlook.

Supply Side

Indonesia The Indonesian thermal coal market remained tight, with miners maintaining firm offers. Trade prices slightly retreated due to softer demand from major buyers.

As of late last week, prevailing offers of Panamax Indonesian 3,800 Kcal/kg NAR coal remained steady at $50/t FOB, with December delivery laycan, falling $2-3/t from the week prior, and around $47-48/t for Supramax vessels.

On November 28, the CCI index for Indonesian 3,800 Kcal/kg NAR coal stood at $48.5/t FOB, down $2.7/t week on week but up $1.7/t from the previous month; the CCI Import 4700 index stood at $70.7/t FOB, falling $1.5/t from the prior week but up $5.7/t month on month.

The Indonesian thermal coal market was under dual pressures from rainfall and the limitation of production quotas. Continued rain disrupted mining and transportation, and many mines ran out of their production quotas.

However, weak demand from major buyers such as China and India led Indonesian miners to slightly lower prices for low- and mid-CV coal, with actual transaction prices dropped.

Sources reported that Indonesia plans to implement export tax by 2026, a move that could weaken its price competitiveness in the global coal market. This led some buyers to adopt a more cautious approach. Due to a slowdown in industrial activity and energy demand in China, Indonesian coal exports had already seen an unexpected decline in October.

Russia Russian high-CV thermal coal prices remained largely stable. Demand for Russian coal was subdued since northeast Asia completed restocking for winter heating. Market participants anticipated that the demand in December will depend on weather conditions and actual coal consumption.

On November 28, Sxcoal assessed Russian 5,000 Kcal/kg NAR thermal coal at $78.5/t FOB Far East ports, down $1/t from a week ago but up $5/t month on month; Russian 5,500 Kcal/kg NAR coal was assessed at $87/t, falling $1/t week on week but rising $5/t from a month earlier.

Russia's coal supply remained stable, with production showing signs of recovery. Data showed in October coal production posted increases, with Kuzbass, the country's main coal-producing region, experiencing three consecutive months of production growth. However, Russia's coal industry still faced significant internal pressures and cost challenges.

On one hand, Russian Railways (RZD) opposed renewing guaranteed volume agreements with Kuzbass for 2026, and strictly implemented non-discriminatory access (NDA) rules for freight, which may result in higher transportation costs and capacity uncertainty for miners.

On the other hand, starting December 1, 2025, Russian rail tariffs will rise by 10%, which is expected to squeeze the export profits of coal companies.

Additionally, Russia's Federal Service for Environmental, Technological, and Nuclear Supervision issued temporary production suspensions for several coal mines, including those in key regions such as West Siberia, due to safety violations.

Australia Last week, Australian thermal coal supply remained tight, especially for high-CV cargoes. Demand from key markets such as China slowed. Despite firm prices, high prices and ample buyer inventory suppressed purchasing interest, resulting in limited transactions.

As of November 28, 5,500 Kcal/kg NAR thermal coal at Newcastle port was at $84.62/t, down $2.34/t from the week ago but up $8.28/t from a month earlier. Prices of 6,000 Kcal/kg NAR coal stayed around $109/t.

Due to declined freight rates of Pacific routes, Australian coal exports slightly fell after reaching recent highs, dampening demand for Australia-India route.

Last weekend, Newcastle Port experienced two days of climate protests, which disrupted coal transportation and temporarily halted port operations. Operations resumed on December 1, and the disruption had no significant impact on Australian coal prices so far.

South Africa The South African thermal coal market was significantly impacted by year-end supply tightness. Many producers already sold out remaining cargoes, with spot availability for December shipment particularly limited, lending some support for prices.

As of November 28, 5,500 Kcal/kg NAR coal at the Richards Bay Coal Terminal (RBCT) rose to $74.52/t FOB, dipping $0.03/t from the week prior but up $4.59/t month on month. The 6,000 Kcal/kg NAR materials rose $1.48/t to $87.11/t FOB.

South Africa's weekly coal exports saw a significant drop, mainly due to transportation delays from the railway to the port and cargo handling issues. These logistical bottlenecks hindered coal shipment capacity at the Richards Bay Coal Terminal (RBCT).

However, the actual spot transactions remained limited, as there was still a gap in price expectations between buyers and sellers. Additionally, demand from India's sponge iron industry, a key consumer of South African coal, was relatively weak recently.

Demand Side

China In the past week, with coal stocks at domestic ports and power plants increasing again, China's demand for imported coal slowed down. Additionally, the domestic coal market weakened significantly, causing a drop in imported thermal coal prices.

As of late last week, traders' lowest bidding prices to utility tenders of 3,800 Kcal/kg NAR coal fell to 465 yuan/t, CFR China with VAT, which equivalent to $48.86/t for Panamax vessels.

On November 28, Sxcoal assessed 3,800 Kcal/kg NAR coal at $59/t CFR South China, down $2.2/t from the week-ago level; the 4,700 Kcal/kg NAR coal was assessed at $79.5/t, falling $1.5/t week on week; and the 5,500 Kcal/kg NAR coal was assessed at $102/t, a $1.3/t fall.

Recently, coal stocks at major northern ports piled high, and power plants were reluctant to purchase, primarily relying on long-term contracts and imported coal. The growth of coal consumption was not strong, and most buyers remained sidelined, awaiting further price declines.

As of November 30, the daily coal consumption at six major coastal power plants was 780,000 tonnes, a 1.52% decline from the previous week. Their coal stock stood at 14.48 million tonnes, an increase of 1.68% from the previous week, available for 19 days of consumption.

Traders were under pressure to sell coal arriving in December. With weak tender interest from power plants and continuous price declines, demand for imported coal remained below expectations.

Although Indonesian low-CV coal still held a price advantage, overall demand was lower than anticipated. While hopes persisted that colder weather would boost power demand, this has yet to materialize, with the market's lackluster conditions unchanged.

India India's demand for imported thermal coal continued to remain sluggish. Despite stable domestic coal production, coal inventories at power plants and ports remained high. Slow growth in electricity demand and steady industrial demand led to negative expectations for imports.

By November 29, Indian power plant coal inventories rose 0.17% from a week ago to 53.36 million tonnes, showed data from the Central Electricity Authority, which was available for 17.5 days of consumption, unchanged from the previous week. As of late last week, 13 plants operated at critical stock levels, up one from last week.

Although India's GDP showed strong growth in the second quarter of this fiscal year, it has not translated into strong coal demand. According to government data, electricity generation in India declined for the second consecutive month in November due to mild weather and slowing industrial activity.

Indian buyers remained highly price-sensitive and were only willing to purchase coal at lower price levels. While Indonesian coal prices remained stable, actual transaction were limited.

Europe The European thermal coal market saw a relatively positive trend in the past week, largely driven by cold weather. In northwestern Europe, falling temperatures significantly boosted heating demand, leading to increased coal consumption.

Last week, 6,000 Kcal/kg NAR coal at ARA ports rose to over $96/t, up nearly $1/t from the previous week. German coal-fired power generation maintained a high capacity utilization rate, while decreasing inventories and winter replenishment needs fueled renewed demand for thermal coal.

As of November 28, the gas futures contract for December delivery at the European benchmark TTF hub was closed at 28.817 euro/MWh, down 5.07 % week on week.

However, market participants expected that after December, as power companies secure sufficient winter supply, trading activity may slow. Therefore, the current demand increase was more as a short-term or seasonal factor, rather than a fundamental shift in long-term trends.