Coal prices dip globally due to Asian hydro surge

According to a report by the Industrial Development Agency, price declines prevailed on international coal markets in June. This is due to a decrease in orders from China and India. Heavy rains in Asia have led to a significant increase in hydroelectric energy production, so there were no buyers for coal.

"In the international coal market in June, sentiments were markedly different from those that dominated in May. Throughout the reviewed month, a downward trend emerged in the main spot markets for high-energy coal," the report said.

IDA reports that demand for spot cargoes in June was weak in both the Atlantic region and the Asia-Pacific region.

"Moreover, greater revitalization of Asian demand in the spot markets is expected with the end of the summer monsoon and, consequently, the cessation of heavy rains. The report notes that these already started in April in southern China, due to which hydroelectric energy production has significantly increased in the country," the report notes.

Additionally, as reported by Reuters in June, China is preparing for even more rainfall in July and August as the "wet phase" of the East Asian monsoon occurs in the country.

"Due to the intensifying circulation of the summer monsoon, there has also been a decline in interest in spot offers from the world's second-largest coal importer after China, India," the report added.