Newcastle coal futures, the benchmark for the top consuming region of Asia, rebounded to $198 per tonne after lingering near the 14-month low of $173 since mid-March amid renewed expectations of lower supply. New legislation passed by Australia to cap greenhouse gas emissions required national coal mines to cut output by 5% per year, pressuring supply from the key exporter.
The move added to concerns of export disruptions following heavy rains in the coal-mining states of Queensland and New South Wales, as well as the closure of a key railway line after a collision. Still, prices remain 50% lower year-to-date due to warm winters in the global north and the sharp pullback in natural gas prices. Data from top producer China showed coal output rose by 9% to 5.9 billion tonnes in 2022.