Coal prices are expected to ease in 2025, according to Joseph Clarke and Alex Thackrah of Argus Media, a energy and commodity price benchmarks provider, who shared their insights in the paper Global Thermal Coal Market Review and Outlook – 2025.
The analysts noted that coal prices across major markets are tightly range-bound throughout 2024, a stark contrast to the record volatility of recent years. Exceptions to this trend were minor price increases during the winter period.
“We expect API 2 prices to fall from an average of $112 (R2 099) per ton in 2024 to around $105 per ton in 2025. Despite this decrease, most seaborne origins should still be able to effectively price into the European market,” they wrote.
Transnet National Ports Authority data showed an 8.5% increase in bulk exports from Richards Bay in 2024, most of which consisted of coal. The annual total reached 75 678 379 tons, still falling short of the Richards Bay Coal Terminal's full capacity of 91 million tons.
The outlook for global thermal coal demand faces significant challenges in early 2025. These include slowing economic growth and steel oversupply in China, a stronger US Dollar, and the looming threat of a tariff war. Donald Trump has indicated plans to raise tariffs following his inauguration on January 20.
“Coal stocks across key demand hubs such as China, India, and Europe remain healthy as of mid-December. The lack of a strong La Niña weather pattern is expected to reduce rain-related supply risks in coal-producing regions such as Indonesia, Colombia, Australia, and South Africa. These factors, along with aggressive pricing by Russian suppliers aiming to retain market share in shrinking markets, are likely to keep prices under pressure in the short term, seasonal risks notwithstanding,” they explained.
However, the analysts also highlighted potential price volatility. With coal-fired power stations in Europe and other regions increasingly operating as peak-load facilities, forward planning has become more difficult. Additionally, tight gas and LNG market balances over the coming months could contribute to fluctuations in coal prices, even at lower levels.
BUSINESS REPORT