Global coal prices soar to a record high as the world scrambles for energy

• Global coal prices are trading at record highs as the world scrambles to secure reliable sources of energy.
• Coal for delivery next month at Newcastle, Australia hit a record high on Monday, while European prices are close to records.

Global coal prices have jumped to a record high as an international energy crisis sends buyers scrambling for fuel.

Coal for delivery at the Newcastle terminal in Australia next month closed at $457.80 per ton on Monday, according to Bloomberg data, the highest level in the data set going back to 2008.

Bloomberg reported that the spot price for coal loaded at Newcastle also hit a record high three times above the level of a year ago.

Meanwhile, European coal prices are trading at or close to record highs. Rotterdam coal for delivery next month has risen sharply over the last few weeks as Russia has squeezed energy flows to Europe, although it remains below its March highs.

October Rotterdam coal futures traded around $390 on Tuesday, down from more than $430 in March. Front-month futures have averaged $305 this year, compared with $62 in 2019. Meanwhile, coal for delivery to Rotterdam next year has surged to a record high.

Coal — the most polluting of all the major fossil fuels — has had something of a renaissance as the prices of oil and natural gas have surged in the wake of Russia's invasion of Ukraine.

The International Energy Agency said in July that the world's consumption of coal is set to pick up in 2022 to record highs last seen a decade ago.

Greenpeace research showed in July that China has been speeding up the approval of new coal power plants. Germany is also reactivating mothballed coal plants as it bears the brunt of Russia's energy cuts.

Ole Hansen, chief commodities strategist at Saxo Bank, said the possibility of Europe having to step up its energy imports from Australia could be driving up coal in the country. He also said supplies are likely to run low in 2023.

"The UK is already importing Australian liquefied natural gas," Hansen said. "In anticipation of such a scenario, this might explain why the Australia coal price trades at a record, along with the futures price."

Russia said it would not restart natural gas flows through the Nord Stream 1 pipeline to Germany on Friday evening, sending gas futures soaring as much as 36% on Monday.