Taps Coogan – March 6th, 2022

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The Russian invasion of Ukraine has sent coal prices exploding higher, as the following chart of benchmark Newcastle coal futures from Bloomberg highlights. Newcastle coal is the benchmark coal price for Asia, the world’s largest coal importing region.

Russia is the world’s third largest coal exporter – after Australia and Indonesia. Ukraine is the 17th largest coal producer in the world, though a minor exporter.

With buyers turning their backs on Russia natural gas and oil exports amid sanctions fears and out of protest, and with the prices of both fuels surging, coal would be a natural fallback for electric grid operators in Asia and Europe.

Alas, little relief will be found in coal markets as Russia is also responsible for about 15% of global coal exports and prices, already high before the invasion, have now more than doubled.

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