European coal prices are set for a period of sharp swings as the Middle East conflict and the northern hemisphere winter approach, with the market closely following every signal from the Strait of Hormuz. Jakub Szkopek of Erste Securities expects that if shipping from the region remains blocked, energy commodities could jump before the cold season starts.
Thermal coal in Europe is currently trading at more than $115 per tonne, and events around the Strait of Hormuz are still the dominant factor driving its direction. The market has been reacting to hopes for a US-Iran agreement and to the risk of renewed military action.
– Hopes for a deal between the US and Iran have been rising, and over the last two weeks that has translated into lower gas prices on global markets – Jakub Szkopek, an analyst at Erste Securities, told WNP.
– Gas price volatility remains high, and a failure to reach an agreement over the Strait of Hormuz or further bombings of Iran could push energy commodity prices up again – he added.
Szkopek also noted that European thermal coal is now about 30% cheaper per gigajoule once the cost of CO2 emission allowances is included.
Hormuz uncertainty hits gas, storage and river transport
European gas storage is only 57% full, against a five-year average of 73% for this time of year. The situation has been made worse by the Middle East conflict, which has reduced LNG deliveries to Europe. According to market information, Qatar Gas, responsible for 17% of LNG supply, has told its clients in recent weeks that force majeure will be extended until October.
Heatwaves across Europe have increased electricity consumption and made it harder to cool power units. The Rhine and Danube have very low water levels, and Hungary last week had to cut nuclear power production because it could not use river water for cooling.
– If maritime transport from this region is not unblocked, prices of energy carriers could gain significantly before the approaching winter season in the northern hemisphere – Szkopek said.
Polish coal market remains under state control
In Poland, coal prices for the professional power sector fell in May and June and are now more than 30% lower per gigajoule than in the ARA ports of Antwerp-Rotterdam-Amsterdam. June brought the first increase in coal stocks in the professional power sector after several months. Utilities may now start building inventories before winter, which should give some support to local prices.
Bogusław Ziętek, head of the Sierpień 80 trade union, points to state intervention as the reason why Polish mining does not benefit from higher demand.
– Unfortunately, in the case of Polish mining, demand growth does not translate into coal price increases, because the government is using manual steering and does not allow prices to rise either for individual consumers or for professional power plants – Ziętek told WNP.
Coking coal, the raw material used in steel production, has fallen in Australia to $212 per tonne in recent days. In the third quarter of 2026, Chinese buyers are reducing purchases and relying more on domestic output and imports from Mongolia. Market sources also see lower blast furnace margins in China and weak demand from the construction sector, where activity has dropped to its lowest level since the COVID-19 pandemic.
The weakness is visible in falling prices of both iron ore and coking coal. Reports from ports in eastern Australia mention unsold coal cargoes that were supposed to be delivered between June and August, so coking coal may remain under pressure until the end of the third quarter.
Źródło: WNP.PL, Fot. kemdim / Shutterstock
