US high-CV coal market gains momentum as gas prices rise and petcoke supply tightens

• • Rising gas prices are boosting demand for high-CV thermal coal

• • Petcoke supply disruptions are encouraging fuel switching to coal

The global high-calorific value (high-CV) thermal coal market has strengthened in recent weeks as geopolitical tensions in the Middle East push natural gas and LNG prices higher, improving coal’s competitiveness in power generation and industrial fuel markets.

European gas prices surged in early March, with Dutch TTF rising above 50/MWh amid fears of supply disruption linked to the conflict in the Gulf region. As gas prices rise, utilities and industrial consumers are increasingly turning to coal as an alternative fuel, supporting thermal coal prices across both the Atlantic basin and Asia.

The European 6,000 kcal/kg coal market is around $123/t delivered into northwest Europe, while South African export coal is near $100/t FOB Richards Bay for April cargoes. In Australia, Newcastle 6,000 kcal/kg cargoes are trading around $129/t FOB as demand for higher-energy coal improves. Against this backdrop, US high-CV coal exports are attracting renewed interest, particularly from Europe and India.

US high-CV coal prices and export levels:

US export coal prices have moved higher alongside global benchmarks. Recent market indications show FOB Baltimore 6,900 kcal/kg NAR at about $88-89/t, while FOB New Orleans 6,000 kcal/kg NAR is around $83/t. These levels position US coal competitively against other Atlantic suppliers when delivered into Europe and Asia. In the domestic US market, Central Appalachian coal has also strengthened.

Over-the-counter trades for 12,500 Btu/lb coal have reached about $83/t, marking multi-year highs as export demand supports pricing. Freight remains a key factor for international buyers. Shipping costs from the US East Coast to India are currently around $42/t, while voyages to Europe are closer to $15/t. These freight economics favour shipments to Europe, where elevated gas prices are supporting coal demand.

Miner sentiment: Europe leads demand:

US miners report strong demand from Europe and are increasingly adopting a cautious selling strategy. One major US coal marketer said producers have shifted from offering cargoes to seeking buyer bids, reflecting the volatile market environment.

“Very volatile market for sure, but we have been successful in pushing price for the second half of this year and next,” a senior marketing executive at a US mining company said. According to the miner, Europe is currently the strongest destination, with some forward transactions already priced in triple-digit territory for late-2026 deliveries.

Producers believe India could soon follow if LNG supply disruptions continue. With uncertainty around gas flows from the Middle East, many miners expect coal demand to remain strong through the remainder of the year. For now, producers are locking in selective contracts while holding back some supply in anticipation of higher prices later in the year.

Petcoke disruption driving fuel switching:

The tightening petroleum coke market is also supporting demand for high-CV coal. The Middle East conflict has disrupted shipments of petcoke from major suppliers in the region, particularly Saudi Arabia. As supply risks increase, industrial users such as cement producers are reconsidering coal as an alternative fuel.

High-CV coal from the US has become an attractive substitute in some markets because it offers comparable calorific value and lower logistical risk compared with petcoke shipments from the Gulf. This dynamic is particularly visible in India, where cement plants often switch between petcoke and imported coal depending on relative pricing.

India: Strong interest but cautious buying:

Indian demand for imported coal remains moderate but stable. In seaborne markets, 5,500 kcal/kg coal delivered into India is around $100-101/t, while mid-grade Indonesian coal remains cheaper at around $70/t CFR. Buyers remain cautious because of high freight costs and uncertain fuel demand.

However, traders say the spread between petcoke and high-CV coal is narrowing, encouraging cement and industrial users to consider switching fuels.

Retail market in Kandla and Tuna:

Indias retail coal market has shown volatility in recent days, particularly in Gujarat’s Kandla and Tuna ports where coal is distributed to brick kiln operators and small industrial users. According to BigMint’s assessment, portside non-coking coal prices at Kandla increased by INR 300/t week on week to INR 12,900/t ex-Kandla. Forward cargoes for upcoming vessels were quoted in the range of INR 14,200-15,150/t depending on arrival timing and vessel allocation.

Prices strengthened further in early March, with some new cargoes offered near INR 16,000/t ex-port, reflecting tighter supply and rising international coal prices. Market participants say demand from brick kilns remains steady as construction activity picks up ahead of the summer season. However, traders report some payment disputes and delivery delays in the retail market, highlighting tight liquidity conditions among smaller buyers.

Market outlook:

The outlook for US high-CV coal remains broadly supportive in the near term. Rising LNG prices continue to improve coal’s competitiveness, particularly in Europe, while higher shipping costs could limit Asian demand but are less restrictive for Atlantic markets. Tight petcoke supply and rising prices may also push industrial consumers toward high-CV coal.

If geopolitical tensions persist and LNG supply remains constrained, US high-CV coal exports could see stronger demand through the second half of the year. For now, miners remain confident that global coal markets will remain supported by energy security concerns and volatility in competing fuels.