Coal prices cooled at the start of the week as demand began to weaken. Friendly temperatures in Europe as well as the coming of the Christmas and New Year holidays have made coal demand expected to decrease.
On Monday’s trade (19/12/2022), the coal price for the January contract on the ICE Newcastle market closed at US$ 370.75 per ton. The price fell 0.34%.
Yesterday’s weakening extended the negative trend in coal prices since last Thursday. In those three days, coal has fallen 2.2%.
Within a week the price of coal weakened 0.6% while in a month it still strengthened 1%. Black sand prices fly 102.4% a year.
Reporting from S&P Global, energy prices may still weaken going forward due to sluggish manufacturing activity during the long Christmas holiday, improving weather, and increased electricity production from wind power.
“There have been hurricanes in a number of regions and this has increased wind production in northeastern Europe to above average ,” wrote S&P in Market Movers Europe, Dec. 19-23.
The peak of winter in Europe is projected to have passed and temperatures will begin to warm again. The warmer the temperature reduces the use of heating so that the use of electricity is sloping.
The temperature in Germany is projected to rise by 2.9 degrees Celsius to 5.4 degrees Celsius. Meanwhile, the temperature in France increased by 1.5 degrees Celsius to 11 degrees Celsius.
Starting to warm the temperature in the European hemisphere makes energy use go down. Demand for electricity in Germany is projected to fall by 2.8 gigawatts (GW) on Tuesday today (20/12/2022) compared to the previous day to a level of 59.5 GW. Demand for electricity in France also slumped 4.1 GW to 59.7 GW.
The sluggish demand for electricity has eased concerns over the supply of gas and coal. The average gas capacity in Europe was still 84.2% at the end of last week.
Meanwhile, coal supply at the Ports of Amsterdam, Antwerp and Rotterdam (ARA) also increased 6% at the end of last week to 6.24 million tons. The ARA port is the entry point for coal trading traffic in Europe.
Since the middle of last year, Europe has indeed increased their coal imports from a number of countries to secure winter supplies. One of the suppliers is Indonesia.
Director of Coal Business Development, Directorate General of Minerals and Coal, Ministry of Energy and Mineral Resources (ESDM). Lana Saria estimates that RI’s coal exports to Europe will set a new record.
RI’s exports to Europe are estimated to reach 6.6 million tonnes in 2022, exceeding the 2012 achievement of 6.2 million tonnes. Until November 2022, coal exports to Europe were recorded at 5.9 million tonnes.
“If the December 2022 projection is the same as the November 2022 realization, namely a total of 0.7 million tons, then the projected realization of coal sales to Europe by the end of 2022 is 6.6 million tons,” said Lana, to CNBC Indonesia.