Coal Prices Expected to Remain Low Through 2024 Due to Oversupply and Reduced Demand
• Thermal coal prices likely to stay weak in 2023-2024 due to oversupply in China from increased domestic production and surge in imports • Prices fell sharply in H1 2023 after extraordinary spike in 2022, but have stabilized recently • Forecasts predict further declines in Newcastle benchmark prices from current $122/tonne to averages of $180/tonne in 2023 and $170/tonne in 2024 • Factors contributing to price dip include fuel substitution to lower cost natural gas, high EU emissions allowance prices, increased supply and exports • Upside risks could come from escalation of Israel-Hamas conflict spiking natural gas and power prices, or weather disruptions increasing power demand