Jakarta, CNBC Indonesia – Coal prices cooled over the Christmas holidays and into the new year. In trading on Tuesday (27/12/2022), January contract stone price on ICE Newcastle market closed at USD 370.5 per tonne. The price is down by 0.16% from last week’s last trade on Friday (12/23/2022).
For the record, the Coal Commodity Market is closed on Monday (26/12/2022) due to the holiday season.
Within a week, coal prices fell 1.6% on an ongoing basis point to point. Within a month, coal prices still increased by 0.54%, while in one year they increased by 114.2%.
The more declining coal prices are caused by favorable weather during the Christmas holidays and before the New Year, as well as weakening gas prices. However, positive news from China prevented coal prices from falling too much.
Bloomberg reports that temperatures in Western Europe will get warmer ahead of the new year. Warm temperatures will also spread to the Nordic region, which was the coldest region in Europe over Christmas.
temperature in Frankfurt, Germany, it will be around 16 degrees Celsius, 10 degrees higher than the average for the past 30 years.
The temperature in Helsinki, Finland will be 6.2 degrees Celsius higher than last week, while in Marseille, France, it will be 17.5 degrees Celsius. The warmest temperatures are expected to persist into the first week of January.
With warmer temperatures, the use of electricity for space heating is not as high as in previous weeks. These conditions prevent concerns from depleting energy supplies, including gas.
The price of Dutch EU natural gas TTF (EUR) closed yesterday at 80.04 euros per megawatt hour (MWh). Prices fell by 3.5% per day and 24.3% per week. This level is also the lowest since mid-June 2022 or the past six months.
Naturally, weakening gas prices have an impact on coal prices, considering that coal is an alternative energy source to gas.
Electricity generation from wind farms is also expected to increase this week. The increased production will reduce electricity generation from coal-fired plants.
Meanwhile, Chinese authorities have continued to ease their Covid-19 policies. China now does not require migrants to quarantine. Easing after easing should further boost Beijing’s economy.
China is the largest consumer of coal, so developments will have a big impact on coal prices.
CNBC INDONESIA RESEARCH TEAM
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