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05.08.202604:17:52UTC+00Coal Slips as India Production Rises

Thermal coal futures retreated to around $130 per ton in early August, easing from more than one-month highs. The pullback came as India’s coal production rose 7.51% year-on-year in July to 69.75 million tons, bolstering domestic supply and reducing the country’s dependence on imports. India also increased coal deliveries to power plants and other downstream users.

Additional downward pressure on coal prices followed a sharp drop in oil prices, triggered by reports of an impending agreement between the US and Iran to reopen the Strait of Hormuz. Cheaper oil weakened incentives for fuel switching, especially in energy-importing economies across Europe and Asia.

At the same time, coal demand in China strengthened. After a relatively mild start to the summer, hotter weather set in, spurring air conditioning use and driving up electricity consumption.

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