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Coal Prices Weaken Amidst the Israel-Hamas War, October 2023

Adi Ahdiat 07/11/2023 13:07 WIB

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According to World Bank data, the average price of Newcastle coal weakened in October 2023, despite the ongoing Israel-Hamas war.

Average Monthly Newcastle Coal Price (January 2020-October 2023)

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Coal Prices Weaken Amidst the Israel-Hamas War, October 2023

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Average Monthly Newcastle Coal Price (January 2020-October 2023)

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The Israeli-Palestinian Hamas war has raged since early October 2023 and showed no signs of abating by early November 2023.

Amidst this conflict, coal prices have weakened. This contrasts with February 2022, when the Russia-Ukraine war erupted and drove up coal prices.

According to World Bank data, the average Newcastle coal price in October 2023 was US$142.12 per ton.

This figure is down 12.5% month-on-month (mom) and down 63.5% year-on-year (yoy).

In its October 2023 Commodity Markets Outlook report, the World Bank projects that coal prices will fall until 2025.

"Assuming the conflict in the Middle East does not escalate, coal prices are expected to fall 49% (yoy) in 2023, down 26% (yoy) in 2024, and down another 15% (yoy) in 2025, but will still remain well above the average price of 2015-2019," the World Bank stated in its report.

The World Bank forecasts a decline in coal prices due to decreasing consumption and increasing production.

"Coal consumption is expected to decline in the power sector due to strong growth in renewable energy and low-cost natural gas," said the World Bank.

"Coal production is expected to increase more than consumption, with strong production growth in the three largest producing countries: China, India, and Indonesia," it continued.

However, several factors could drive up coal prices, namely an escalation of the Israeli-Hamas war and the El Niño weather phenomenon.

"An escalation of the conflict could drive up coal prices if it increases natural gas prices," said the World Bank.

"In addition, weather disruptions such as heatwaves and droughts caused by El Niño could push up coal prices. El Niño could increase electricity demand while reducing the supply contribution from hydropower plants," it added.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."