Exxaro export coal prices surge amid Middle East conflict

EXPORT thermal coal markets improved in the first half of 2026, said Exxaro Resources, with the Johannesburg miner saying prices increased to as much as $124/t – a 35% lift – during the first six months of its financial year ended June.This was in part owing to the attack on Iran by the US and Israel in February, and consequent Middle East conflict. Markets switched out of LNG into coal during the period as shipping through the Strait of Hormuz was all but halted.But there was also a shift in export strategy by Indonesia which reduced sales in an effort to stabilise and improve the seaborne thermal coal market.The upshot of these factors was improved support for coal prices. Consequently, Exxaro today forecast a higher average export price of $105/t ex-South Africa for the first six months of its financial year – a “notable increase” from $92/t in the first half of the corresponding period. The API4 index, the benchmark export price, reached 31-month high levels above $120/t, it ssaid.Although a peace deal between the US and Iran is pending, the outlook remains uncertain and supportive of the coal market for the remainder of the year, said Riaan Koppeschaar, CFO of Exxaro. “This creates a potential opportunity for alternative suppliers, including South Africa, to capture incremental market share,” he said in firm’s customary pre-close interim statement published on Monday.Exports during the period increased to 3.94 million tons (Mt), 15% higher, and took total group sales 6% higher to 20.2Mt, said Koppeschaar. Exxaro forecasts full year export sales to be between 7.3 to eight million tons, while total coal sales will be 39.4 to 42.8Mt.This is despite ongoing difficulties with logistics. Exxaro said state-owned rail and ports company Transnet had improved its performance on the coal line. The company is running at an annualised tempo of 60.79Mt representing a 7% year-on-year improvement.However, direct rail flow from Grootegeluk, Exxaro’s biggest colliery, “remains a concern”, said Exxaro. There were only three to four trains per week in the reported period which is well below the contracted 11 trains weekly. “Engagements with TFR are ongoing, with several initiatives aimed at addressing these challenges and improving overall corridor performance,” Koppeschaar said.On Eskom supply, however, sales fell partly owing to an outage at the Matimba power station coal stacker. This would affect offtake at its Waterberg operations.Coal sustaining capex would be significantly higher year-on-year at R1.46bn compared to R866m in the first half of last year. This was owing to replacement of equipment at the group’s Belfast operation in Mpumalanga and at Grootegeluk in Limpopo province.Commenting on the coal market for the second half of Exxaro’s financial year, Koppeschaar said a new strategy unveiled by Indonesia to centralise export sales through a newly created state-owned company, effective June 1, could potentially exert upward pressure on global coal prices.In addition, rising diesel costs in Australia are constraining thermal coal supply, which may prompt key importing regions to diversify their procurement strategies. This creates a potential opportunity for alternative suppliers, including South Africa, to capture incremental market share, said Koppeschaar.The post Exxaro export coal prices surge amid Middle East conflict appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com