Julius Baer Research | The past years’ least loved commodity has made a silent comeback. Coal prices are up more than 30% from the earlier year lows. Northwest European coal import prices, the leading benchmark, trade above USD 55 per tonne. The comeback is in part related to the oil and natural gas price rally.
BoAML | Global coal prices rallied strongly since March on rising crude oil prices and Chinese production cuts. Front month coal prices in Newcastle rose by $5 to $50/mt, outpaced by a staggering $17 rise in 12-month forward prices to $58/mt. How did this happen? Higher oil prices pushed the global coal cost curve up by about $5/mt, on our estimates, explaining about 30% of the rally in coal forward prices.