Newcastle coal futures skyrocketed to a record high of $300 per tonne in early March and are now up almost 90% since the beginning of 2022, as mounting sanctions on Russia for invading Ukraine led to an international energy crunch and exacerbated concerns over the commodity’s supply. Germany is poised to create coal reserves for electricity power plant operators, while Italy announced it could reopen some shuttered coal plants.
Asian customers have also been scrambling to find alternative supplies to replace Russian coal. Such concerns about disruptions to Russian energy supplies drove oil well above $100 per barrel while natural gas in Europe soared nearly 30% to above €125 per megawatt-hour. Aside from Ukraine headlines, investors were already bullish on coal since early 2022 amid supply disruptions in top exporting countries such as Indonesia and Australia.