FX.co ★ Coal Extends Decline on US-Iran Deal

Thermal coal futures fell below $145 per ton, extending their pullback from nearly three-year highs after the United States and Iran reached an interim peace agreement that opens the way to reopening the crucial Strait of Hormuz. The accord eased concerns over regional supply risks, pushing energy prices lower and reducing the incentive for fuel switching. It also provides for the lifting of sanctions on Iranian oil exports, with further negotiations on nuclear issues and potential additional economic incentives for Iran set to follow.

Previously, the prolonged disruption in the Strait had driven energy importers across Asia and Europe to seek alternatives to Persian Gulf natural gas, with Japan and South Korea in particular ramping up coal consumption during the conflict. At the same time, coal prices had surged to multi-year highs earlier this month after Indonesia tightened export controls on key commodities, a move expected to delay shipments from the world’s largest coal exporter.