The South Korean coal market firmed slightly last week. As seasonal cooling demand ramps up, coal still ahead of gas in the merit order for power generation. NAR 5,800 kcal/kg coal $0.86/t higher on the week at $55.29/t cfr South Korea. However, supply-side fundamentals in Asia-Pacific remain weak and key fob prices softened at the start of July.
South Korean daily peak power demand has slipped back below seasonal norms in recent days, but consumption typically climbs steeply in July in tandem with hotter weather. The country's meteorological administration said there is a 40 percent chance of above-average temperature this month and a 50 percent chance in August and September.
A slight drop in nuclear availability this month compared with June may also compound the need for greater fossil fuel generation. Around 18.4GW of nuclear capacity is scheduled to be available this month, from 18.7GW in June, although this would still be up from actual output of 15.7GW in July 2019. Compared with July 2019, around 850MW less state-owned coal capacity is currently expected to be available this month.
