COAL
API 2 coal prices are forecast at around $100/ton in the next months, with an expected boost in EU coal demand from the return of the Datteln hard-coal plant and improved gas-to-coal fuel switching signals offset by structural decline in European demand amid coal plant closures according to Argus.
- API 2 coal prices have been trading in the $100-125/ton range recently, with the $100/ton level providing a floor as it is reflective of the marginal breakeven costs.
- European coal prices are forecast to fall below $100/ton in 2026 with more coal plant closures and the next wave of US LNG being added to the market.
- European coal-fired capacity declined by 30% on the year by the end of 2024. Capacity is further expected to decline by 38% by the end of 2025.
- European coal demand – incl. Turkey - in 2025 is forecast at 65.2mn tons and at 62.2mn tons in 2026, compared with 68mn tons in 2024, with coal plant closures in Germany and Italy weighing on demand.
- API 2 coal prices have broken the correlation with TTF price moves since November. This is partly due to a sharp decline in EU coal capacity weighing on the effectiveness of the coal-to-gas switching mechanism.
- Rotterdam Coal MAR 25 down 1% at 104 USD/MT
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