[Ferro-Alloys.com] The South Korean coal market firmed slightly this week, with coal still ahead of gas in the merit order for power generation as seasonal cooling demand ramps up.

 

Argus assessed NAR 5,800 kcal/kg coal $0.86/t higher on the week at $55.29/t cfr South Korea. But supply-side fundamentals in Asia-Pacific remain weak and key fob prices softened at the start of July. Argus assessed NAR 5,800 kcal/kg Australian coal $0.64/t lower on the week at $43.01/t fob Newcastle.

 

South Korean daily peak power demand has slipped back below seasonal norms in recent days, but consumption typically climbs steeply in July in tandem with hotter weather. The country's meteorological administration said there is a 40pc chance of above-average temperature this month and a 50pc chance in August and September.

 

Around 850MW less state-owned coal capacity is currently expected to be available this month compared with July 2019, which, in conjunction with firmer nuclear output, will likely curb coal burn relative to last year. But the solid fuel retains a cost advantage over natural gas for power generation, meaning coal-fired plants will likely be first to ramp up at times of peak demand or low renewable output.

 

Source: Argus media