Coal prices in Europe have stabilized at around $115 per tonne, but the market is entering a new phase shaped by shifting global supply chains, geopolitical developments, and changing demand patterns in Asia. The reopening of the Strait of Hormuz is encouraging Persian Gulf producers to resume output, while China’s rising imports and Japan’s energy security concerns are reshaping the landscape.
The global coal market is undergoing a transformation that few predicted just months ago. According to Jakub Szkopek, an analyst at Erste Securities, the price of thermal coal in Europe is now only 10 percent cheaper than gas when accounting for CO2 costs. This narrowing gap is putting downward pressure on coal prices in the coming months.
May and June brought a surprising revival in overseas coal markets. Asian imports surged as China increased purchases due to weak domestic production, while Japan and South Korea moved to secure their energy supplies. However, Szkopek warns that pressure on Asian purchases may ease in the months ahead.
Polish coal finds its footing
On the domestic Polish market, thermal coal prices rose in April but fell in May to around 14 PLN per GJ. Polish coal is becoming competitive in the region, with ARA prices including transport currently at 17 PLN per GJ. This price advantage supports exports, though industry stocks have declined to just over 8 million tonnes from more than 11 million at the end of 2025.
Szkopek does not expect a significant rebound in local thermal coal prices in the near future. The market appears to be settling into a new equilibrium, shaped by global trends and domestic production costs.
Steel sector drives coking coal demand
Australian coking coal prices remain above $240 per tonne. A recent industry conference in Singapore confirmed that Australian producers face cost pressures from royalty fees, permitting delays, and activist campaigns. A tragic accident at a Chinese coal mine in May 2026 has tightened safety oversight and could reduce annual supply by up to 30 million tonnes.
Mongolia is expected to maintain its role as a regional supplier to China without threatening Australia’s market position. Coking coal prices in Australia should remain above $240 per tonne in the coming weeks, according to Szkopek. Meteorological forecasts also point to a rising risk of El Nino, which could disrupt Australian deliveries.
Changes to steel safeguard measures in Europe, effective from July, will reduce the total amount of steel that can be imported at low tariff rates by 33 percent. This should support European steel producers and translate into higher demand for coke and coking coal.
Szkopek estimates that JSW’s EBITDA could rise to around +200 million PLN in the second quarter of 2026. However, even at this level, the company will generate negative cash flow and see its debt grow quarter on quarter.
Looking at the broader picture, China has invested heavily in modern coal chemistry over recent years. Projects under development could increase annual coal demand by approximately 300 million tonnes, equivalent to the entire production capacity of South Africa. China, India, and the United States still have virgin coal deposits that allow for shallow, often open-pit mining.
Jacek Korski, former head of Kompania Węglowa and a mining expert, noted that these deposits are nothing like the deep coal seams found in the European Union or Ukraine. In 2025, China alone produced 4.83 billion tonnes of coal.
The development of the chemical industry is creating new, long-term sources of demand. Growing volumes of coal are being converted into a wide range of chemicals, including ammonia-based fertilizers and olefins that serve as building blocks for plastics and adhesives.
Źródło: WNP.PL, Fot. New Africa / Shutterstock
