FX.co ★ Thermal Coal Rises to 4-Month High

In June, Newcastle coal futures climbed to $105 per tonne, marking their highest level in four months and building upon the temporary recovery since plummeting to a four-year low of $93.7 in late April. This rise is attributed to a slight increase in demand. Trade data indicates that seaborne thermal coal imports by key consumers, India and China, reached their highest level in five months in May. This upturn coincides with China's state planner urging power plants to augment their domestic stockpiles by 10% to capitalize on lower prices. Despite this, front-month Newcastle contracts remain more than 15% lower compared to last year due to the persistent oversupply of thermal coal. In the first quarter, Chinese fossil-fuel power output fell by 4.7% compared to the previous year, owing to decreased power demand and robust renewable energy supply. On the supply side, China’s domestic production increased by 4% year-on-year in May, aligning with its intention to boost output by 1.5% to 4.82 billion tons for the year, following record output levels set in 2024.