FX.co ★ Coal Hovers at Near 4-Year Low

In March, Newcastle coal futures dropped to $97 per tonne, reaching their lowest level in almost four years, due to expectations of increasing global supply. China's production is projected to grow by 1.5% to reach 4.82 billion tons by 2025, following a record production year in 2024. This expansion aims to boost mining capacity in response to potential supply risks associated with carbon emission restrictions and mine closures due to safety violations. The situation arose as utility companies grapple with coal inventories reaching historic highs, having increased by 12% in the two months leading up to October. Additionally, Indonesia's coal production hit an unprecedented 836 million tonnes in 2024, surpassing its target by 18%. Meanwhile, the country's growing investment in alternative energy sources has dampened future demand for coal. As a result, Glencore observed that several Australian coal producers, notably those impacting the Newcastle grade, are contemplating closures due to shrinking profit margins driven by lower prices.