TELF AG published an article analyzing the European coal and natural gas markets on July 18, 2023.
— TELF Analyst
LUGANO, TICINO, SWITZERLAND, July 20, 2023/EINPresswire.com/ — TELF AG, a full-service international physical commodities trader, published an article analyzing the European coal and natural gas markets on July 18, 2023. The article examines the recent fluctuations in these sectors, discussing the factors influencing market dynamics, changes in demand patterns, and supply risks. TELF AG’s analysis looks at the current state of the European energy landscape and its potential implications.
As per TELF AG’s report, the European coal market has experienced significant fluctuations over the past week, resulting in a substantial loss of approximately $20 per ton. This downturn has led to the erasure of gains made in the previous 4-5 weeks. The decline is evident in the API2 and gCNew indices, with a spread of approximately $25 per ton. TELF AG predicts that Russian coal will continue to flow towards Asia, while Colombian and South African suppliers are redirecting their focus to India and the Pacific region due to reduced demand in Europe.
TELF AG’s analysis highlights the correlation between the API2 and TTF indices, which exhibited strength in June and early July but weakened in the last week. However, it is anticipated to strengthen once again. The report also raises potential risks in the Colombian coal market due to the state of emergency declared in the La Guajira region, which could impact Cerrejon production. Additionally, South Africa’s RBCT exports are expected to underperform due to maintenance and logistical challenges in the rail system. Meanwhile, Indonesian coal exports have decelerated but remained relatively stable year-on-year.
In terms of demand, TELF AG notes the absence of fresh demand in Europe, leading to a slight decrease in ARA stocks as consumption remains low. However, the report highlights potential risks such as a hot summer, hydro shortages, and nuclear fleet outages that could impact pricing. Increased nuclear power production is expected to lead to reduced imports to Japan and South Korea. Chinese coal demand remains strong, but increased domestic production and recent safety checks may hamper production performance in the second half of the year. Indian buyers are adopting a wait-and-see approach, anticipating further price drops while latent demand persists.
The article also looks at the European natural gas and liquefied natural gas (LNG) market, which experienced a significant drop in TTF prices. Norwegian supply increased, and US LNG plants resumed operations during this period. However, European consumption continued to face challenges. TELF AG highlights the rise in Chinese LNG demand by 24% in June and the current netbacks favoring Asia over Europe for US exporters, which poses risks to the European market. The analysis suggests that coal consumption may remain favorable compared to gas by the fourth quarter, signaling expected increases in coal consumption and the emergence of fresh demand. Furthermore, the scenario involving a cold winter and reduced Russian gas supply could significantly deplete storage reserves by April.
In conclusion, TELF AG’s analysis emphasizes the notable volatility witnessed in the European energy market, particularly in the coal and natural gas sectors. The article highlights the influence of shifts in demand patterns, supply risks, and market dynamics on these fluctuations. While stability is expected in the near term, the market remains vulnerable to potential risks and uncertainties. Market participants are advised to closely monitor gas market dynamics, as they are likely to play a crucial role in shaping the energy landscape in the coming months.
To access the full article, please visit TELF AG’s Media Page here: https://telf.ch/telf-ag-on-the-current-state-of-european-coal-and-natural-gas-markets-july-18-2023/
About TELF AG:
TELF AG is a full-service international physical commodities trader with 30 years of experience in the industry. Headquartered in Lugano, Switzerland, the company operates globally, serving customers and providing solutions for commodities producers worldwide. TELF AG works in close partnership with producers to provide effective marketing, as well as financing and logistics solutions, which enable suppliers to focus on their core activities and to access far-reaching markets wherever they may be.
Its flexible, customer-focused approach allows TELF AG to create tailor-made solutions for each producer, thereby facilitating long-term partnerships. Additionally, consumers widely recognize them for their operational excellence and reliability.
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