Middle East disruption lifts thermal coal demand, prices, WoodMac says
Thursday, April 16 2026 - 08:03 AM WIB
By Romel S. Gurky
Prolonged disruption to Middle East energy supplies is driving a rebound in global thermal coal demand and prices, according to Wood Mackenzie.
Sushmita Vazirani, principal analyst for bulk commodities at Wood Mackenzie, said tighter liquefied natural gas (LNG) supply and rising prices are prompting countries to switch back to coal for power generation.
“In supply shocks of this scale, coal becomes a critical fallback for energy security,” Vazirani said.
Benchmark prices have risen in recent months, with FOB Newcastle 6,000 kcal/kg coal averaging $126 per tonne in March and increasing to around US$132 per tonne in recent trades, up from $114 per tonne in February.
The disruption to LNG flows through key routes such as the Strait of Hormuz has had spillover effects on coal markets, even though major coal exporters are not directly exposed to the route.
Read also : Asia seaborne thermal coal imports rebound in March, outlook mixed
Regional markets have responded with increased reliance on coal. In Northeast Asia, coal-fired generation remains firm, with Taiwan preparing to restart the 2.1 GW Hsinta coal-fired power plant. South Korea has raised guidance for Russian coal imports, while Japan is expected to rely more on nuclear power alongside coal.
China, where gas accounts for a small share of power generation, is shifting toward domestic coal supply, while in India higher LNG and petcoke prices are driving industrial users back to coal.
In Europe, countries including Italy are considering restarting coal-fired capacity, with the Amsterdam-Rotterdam-Antwerp (ARA) market particularly exposed to gas supply disruptions.
Wood Mackenzie said rising crude oil prices are also increasing production costs for coal miners, as higher diesel prices add pressure to supply.
For every $10 per barrel increase in crude oil prices, coal mine site costs rise by about $1 to $3 per tonne, potentially constraining output even as demand increases.
Editing by Alexander Ginting