The price of thermal coal in Asia has risen to a two-year high. As power plants stock up fuel for the winter, the coal market, which is already affected by strong demand and supply blockages in Indonesia and other places, has further tightened. The International Energy Agency had anticipated a decline in global coal consumption this year, but then switched to forecasting a 1.2% increase to a record level. The war in Iran caused oil and gas prices to soar, making the electricity industry more dependent on coal. Analysts at Morgan Stanley said in a research report last week that the Middle East energy crisis has made “the long-term prospects for thermal coal demand more resilient.” The bank raised the long-term export price forecast for Newcastle thermal coal, the Asian benchmark, by 4% to $125 per ton. Newcastle thermal coal futures have risen more than 40% this year, closing at their highest level since August 2024 on Tuesday. The war in Iran prompted Asian buyers to switch from more expensive natural gas to coal, and now demand for fuel reserves for heating in winter is further driving up demand for coal.

The price of thermal coal in Asia has risen to a two-year high. As power plants stock up fuel for the winter, the coal market, which is already affected by strong demand and supply blockages in Indonesia and other places, is further tightening. The International Energy Agency had anticipated a decline in global coal consumption this year, but then switched to forecasting a 1.2% increase to a record level. The war in Iran caused oil and gas prices to soar, making the electricity industry more dependent on coal. Analysts at Morgan Stanley said in a research report last week that the Middle East energy crisis has made “the long-term prospects for thermal coal demand more resilient.” The bank raised the long-term export price forecast for Newcastle thermal coal, the Asian benchmark, by 4% to $125 per ton. Newcastle thermal coal futures have risen more than 40% this year, closing at their highest level since August 2024 on Tuesday. The war in Iran prompted Asian buyers to switch from more expensive natural gas to coal, and now demand for fuel reserves for heating in winter is further driving up demand for coal.