May 2023 Coal Price Down 57% Year-on-Year

According to World Bank data, the average Newcastle coal price reached USD 160.48 per ton in May 2023.

The price has fallen by approximately 17% compared to April 2023 (month-on-month/mom), and is about 57% lower than a year ago (year-on-year/yoy).

The World Bank projects that global coal prices will weaken until next year.

"Coal prices are expected to fall by 42% in 2023 and a further 23% in 2024. However, the price is still well above the average for 2015-2019," the World Bank stated in its April 2023 Commodity Markets Outlook report.

According to the World Bank, global coal demand is weakening this year, influenced by carbon pricing policies and the decline in natural gas prices in several major consuming countries, particularly the United States and Europe.

"The Russian invasion of Ukraine has strengthened incentives to shift away from fossil fuels, both through increased renewable energy production and reduced energy consumption, particularly in the United States and Europe," said the World Bank.

"This is driving the expectation that US and European coal consumption will continue to decline," it continued.

The World Bank also mentioned that coal prices could fall further if the global economy slows more severely than expected.

On the other hand, there are several conditions that could potentially boost coal prices this year.

"In the short term, if China's economic recovery is stronger than expected, it will increase demand for imported coal for industry and power plants," said the World Bank.

"If there is a decrease in production, or a cut in coal exports from Russia, this could also increase prices," it continued.