In August 2023, Coal prices experienced a significant surge in both the Asian and South African markets, driven by a combination of factors, including increased government royalties in Australia's New South Wales, rising demand from China, and production challenges caused by adverse weather conditions.

The price of Coal in the Asian market increased by approximately 19% during August 2023, primarily due to two key factors. Firstly, the government of Australia's New South Wales announced its intention to raise royalty rates imposed on Coal miners. This move aimed to maximize revenue amidst elevated prices of products, which were further fuelled by concerns over energy supplies following Russia's invasion of Ukraine. Secondly, China's renewed appetite for Australian Coal played a significant role in driving up demand. Beijing had previously imposed an unofficial ban on Coal imports from Australia, but this ban was lifted, resulting in a realignment of seaborne product flows in Asia. Imports of thermal Coal by China started to strengthen in March, coinciding with the end of the unofficial ban. However, the product producers in the region reported record-high production costs in their recent financial reports. The La Niña weather pattern had caused flooding risks, impacting production. While these risks have receded, Australia is now facing the possibility of transitioning into an El Niño phase, as the Bureau of Meteorology warned. This could lead to above-average heat and dryness, directly affecting Coal mines and potentially further impacting production.

Additionally, labor costs have been cited as a continuing trend, with a shortage of miners attracted to the industry. Geraldine Slattery, President of Australia, estimated that the cost of pay rises could further increase the operating costs of existing operations.

The IEA noted strong overseas demand for thermal energy products, focusing on major regions such as China and India. This demand, however, does not align with the high-energy Coal markets that Australian producers target. As the world's second-largest thermal Coal exporter, Australia's producers have recovered from flood-constrained production over the past year and are poised to increase output. In New South Wales and Queensland, at least 23 Coal mine projects involving expansion or extension of thermal Coal production are under consideration.

In the South African market, the price of products increased by approximately 23% in August 2023. South Africa's thermal Coal exports rose by more than 10% on a month-on-month basis during the same period. This export surge followed earlier delays caused by rain and flooding at Transnet, affecting stockpiles and truck offloading in July. These constraints eventually eased out, leading to enhanced exports in August.

In the USA and Europe, product prices slightly increased by around USD 2 per Metric Ton (MT) in August 2023. This increase was influenced by global market dynamics, particularly in China, South Africa, and Australia. The rise in Coal prices in these regions had a ripple effect on the European and American markets.

According to the Energy Information Administration (EIA), US Coal production in the same period totaled about 11.9 Million Short Tons (MMst), which was 1.4% lower than the previous week's estimate but 0.9% higher than the production estimate in the comparable week in 2022. East of the Mississippi River, Coal production was 5 MMst, while west of the Mississippi River, Coal production totaled 6.8 MMst. These production figures were influenced by various factors, including market conditions and supply dynamics, ultimately supporting product prices in the USA.