FX.co ★ Coal Rises on Tightening Supply

Coal futures rose above $145 per ton, rebounding from one-month lows, as tightening global supply and the prolonged conflict in the Middle East continued to spur a shift from natural gas to coal in power generation. Indonesia, the world’s largest exporter of thermal coal, reported that shipments in August were down 23% year-on-year, hitting their lowest level for that month in five years.

This decline comes as global coal demand is on track to reach a record high this year, amid gas supply disruptions linked to the Iran war. Indonesian thermal coal exports have also been limited by government production quotas, regulatory uncertainty, and the impact of a strong El Niño.

In its Coal Mid-Year Update 2026, the International Energy Agency noted that surging LNG prices, driven by the blockage of the Strait of Hormuz, are prompting major economies—including China, India, Japan, South Korea, and even countries in Europe—to increase their reliance on coal-fired power generation.