A global business intelligence service predicted the value of one fossil fuel will soar due to Eastern Europe’s largest military conflict since World War II.
Coal prices could jump 168 per cent following Russian President Vladimir Putin’s proposed invasion of Ukraine and international sanctions against Russia’s Central Bank, National Wealth Fund, Ministry of Finance, elite oligarchs, air travel routes, oil exports and more.
Rystad Energy confirmed the coal spot price recently rose 148 per cent to US$462 (A$633) a tonne since 23 February 2022. The growing number of sanctions against Russia is now expected to increase the commodity’s value even further.
“There is simply an almost complete absence of surplus thermal coal available globally [and] prices have shot past US$400 (A$548), and the US$500 (A$685) per tonne mark seems to be in play,” Rystad coal vice president Steve Hulton said in a public statement.
The remarks came amid growing speculation that blocking Russian commodities could cause an annual supply shortfall of up to 144 million tonnes (mt) of thermal coal, and about 37 mt of metallurgical coal, based on Macquarie data.
The Australian Trade and Investment Commission as well as Australian Department of Industry, Science, Energy and Resources officials recently held talks with domestic coal producers about the potential Russian commodity shortfall. They want our industry to temporarily supply coal to the European Union (EU) and Asia regions, which are expected to be hardest hit.
During 2021 Russia supplied EU member states with 36 mt of thermal coal, representing 70 per cent of all thermal coal imports for the year. Poland sources 90 per cent of its coal from the world’s largest country.
Colombia, South Africa and other markets are speculated to help cover the coal supply shortfall. However, the United States is unlikely to immediately assist due to investor activism and multiple mine closures across America.
Click here to read the full forecast.
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