Key Highlights

• Coal Prices Retreat from Highs: Thermal coal has fallen below $130 per ton, pulling back sharply from near three-year highs as the energy crisis driving fuel switching eases.

• Asia's Wartime Coal Pivot Unwinding: Japan and South Korea's increased coal consumption during the Persian Gulf gas disruption is reversing as the Strait of Hormuz reopens.

• Indonesia Export Controls: Earlier export restrictions from the world's largest coal exporter had pushed prices to multi-year highs, adding ongoing supply-side complexity.

Thermal coal futures fell below $130 per ton, extending their retreat from near three-year highs after the US and Iran signed an interim peace agreement that paves the way for the reopening of the crucial Strait of Hormuz shipping corridor.

The development pushed broader energy prices lower across the board and reduced incentives for fuel switching among power generators that had turned to coal during the height of the Persian Gulf disruption earlier in 2026.

The peace agreement also includes the lifting of sanctions on Iranian oil exports, while negotiations on nuclear issues and potential additional economic incentives for Iran are expected to follow in subsequent rounds of diplomatic talks.

The prolonged disruption to Persian Gulf natural gas flows had previously driven energy importers across Asia and Europe to seek alternatives, with Japan and South Korea notably increasing coal consumption during the conflict as a stopgap measure to maintain power generation capacity.

Meanwhile, coal prices had earlier surged to multi-year highs after Indonesia tightened export controls on key commodities, a move that delayed shipments from the world's largest coal exporter and added a layer of supply-side complexity to the global thermal coal market even as wartime demand eases.

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