Thungela Resources – Navigating thermal coal markets
Geopolitical tensions and rising tariffs are significantly disrupting global supply chains and constraining economic growth. Consequently, energy security has become central to national economic strategies, driving an increase in domestic production in key demand countries such as China and India.
The impact of slowing growth on coal demand, coupled with increased domestic production, has resulted in high stockpile levels at major import hubs, leading to depressed prices.
Despite the lower demand for coal in the first half of 2025, coal production is likely to remain at levels similar to 2024, driven mainly by higher in-country production in China and India. On the other hand, production from Indonesia has slowed down as a result of the lower coal prices and the impact of adverse weather conditions.
Production in Australia is also lower as a result of mine accidents and adverse weather conditions in the first half of the year. Columbia’s main coal producers have recently announced a reduction in annual thermal coal production due to the low coal price environment.
Looking ahead, the long-term coal fundamentals remain supportive, although demand for the balance of the year remains contingent on the normal restocking activities in the Northern Hemisphere. The slowdown in global economic growth may result in coal prices remaining under pressure in the short term. In this scenario, further production curtailment is likely to aid rebalancing of supply and demand in the seaborne market.
Thungela is currently in a period of portfolio change. The ability to successfully execute on its strategic priorities will ensure that it reshapes its business and entrench resilience through the cycle. As it navigates ongoing complexities in the operating environment and uncertainties in the macroeconomic landscape, it has conviction in the outlook that high-quality thermal coal will continue to play a fundamental role in the global energy demand.
