Coal Climbs on Qatar LNG Disruptions

Coal prices surged more than 8% to around $128 per ton, hitting their highest level since December 2024, after a rare shutdown at Qatar’s liquefied natural gas facilities boosted demand for fuel switching in the power sector. The move follows an Iranian drone strike on Qatar’s main LNG export hub, highlighting escalating tensions in the Middle East. The facility, which supplies about 20% of global LNG, had never fully halted operations in its 30-year history. With many Asian economies reliant on Qatari LNG, Taiwan indicated it may ramp up coal-fired power generation if the disruption persists. Meanwhile, expectations of strong global demand outweighed the shift toward cleaner energy, with China, the world’s largest coal producer and consumer, adding new coal-fired capacity to maintain energy security and grid stability.

Coal prices climbed toward $120 per ton, reaching their highest level since December 2024, as expectations of resilient global demand outweighed the ongoing transition toward cleaner energy sources. China, the world’s largest coal producer and consumer, continued to add new coal-fired power capacity as Beijing prioritizes energy security and grid reliability. Investors are also awaiting signals from China’s upcoming parliamentary meeting for further demand guidance. The annual “Two Sessions” will take place from March 4 to around March 11, when authorities are expected to release the 15th Five-Year Plan outlining policy objectives for 2026-2030. In the US, President Donald Trump has moved to bolster the struggling coal-fired power sector, allocating $175 million in federal funding to modernize six plants and directing the US Department of Defense to procure electricity from additional facilities.

Coal prices held above $115 per ton in late February, hovering near their highest level in a year, as expectations of resilient demand offset the longer-term global shift toward cleaner energy sources. China, the world’s largest coal producer and consumer, commissioned 78 GW of new coal-fired power capacity in 2025, marking the highest annual addition in a decade. The expansion underscores Beijing’s emphasis on energy security and grid stability during peak demand periods, even as non-fossil fuel generation capacity surpassed fossil fuel-based capacity for the first time. China retains the world’s largest coal power fleet and accounts for roughly 71% of global coal capacity currently under development. In the US, President Donald Trump has taken steps to support the struggling coal-fired power sector, allocating $175 million in federal funding to modernize six plants and directing the United States Department of Defense to procure electricity from additional facilities.