A lot has already been said about the worrying level of European gas stocks and its strong impact on global energy prices with notably TTF front-month prices breaching the €50/MWh mark and German Cal 22 power prices breaching the €90/MWh mark in week 35.  But thermal coal remains a key driver of the European energy market as it defines the level at which we can see a cut in gas demand, notably through a gas-to-coal switch in the power generation sector.

And a quick look at coal fundamentals adds further bullishness to the current energy supply picture. Coal stock levels in key consuming regions are at multi-year lows in China, India, Europe and the US a few weeks before the start of the heating season on the back of strong coal demand for power generation mostly driven by economic recovery in Asia.

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