In recent times, coal prices have seen a spectacular drop in international markets. However, this doesn’t mean that imported coal is dominating the Polish market. According to a journalistic analysis published in “Dziennik Zachodni,” Polish coal has successfully competed with prices based on the ARA index. Surprisingly, not only in terms of quality but also in price, domestically sourced coal is the clear winner in Poland.
Journalists conducted a detailed examination to verify whether July’s coal prices for heating homes and apartments support the idea circulating in the media that it’s wise to stock up on fuel during the summer for the winter season. Coal prices have been decreasing on the market, and sellers are enticing customers with numerous discounts. Nevertheless, the cost of the popular fuel for heating households is still significantly higher than before the 2022 crisis. The ARA indexes in European ports exert strong pressure on sellers in Poland. However, the comparative data gathered by “Dziennik Zachodni” journalists shows that domestic producers have successfully adapted to this change.
The government’s municipal supply program (with prices fixed at 2,000 PLN per ton) played a crucial role in overcoming last year’s high prices in private coal depots. Additionally, the successful strategy of the Polish Mining Group PGG S.A. has broken the archaic and unnecessarily expensive sales and distribution model of coal in the communal sector.
Advertisements for coal in the media and on the internet are a novelty in Poland this summer! It seems that the shortage is behind us, and now is the most advantageous time to stock up for the upcoming heating season, as coal is relatively cheap, and sellers are offering discounts. Therefore, the journalists tried to investigate how much the prudent buyers, purchasing coal in summer, will pay for winter fuel.
Coal prices are spectacularly dropping in foreign markets. In early June of this year, the price declines at the coal ports in Amsterdam, Rotterdam, and Antwerp (where the so-called benchmark, the ARA index of European coal prices, is established) broke the psychological barrier of one hundred dollars per tonne for the first time in the last two years. When converted to Polish złoty, coal per tonne in ARA cost just under 400 PLN. This means that there has been strong pressure on the Polish market for at least a month to reduce the prices of “black gold.” However, it is not possible to directly copy ARA prices, as the farther away from the sea terminals, the more expensive the transportation of raw materials will be. Additionally, prices in depots are increased by intermediaries’ margins and sellers themselves.
Last year, many people in Poland witnessed that imported coal from overseas ports is often of low quality and requires expensive sorting and removal of unwanted fractions. Coal extracted on other continents might have uncertain or variable quality, being softer, more humid, and burning less efficiently than the coal we are accustomed to in Poland. The ARA prices are also highly dynamic: on June 20th, the price had already risen compared to the beginning of the month and amounted to 118 dollars per ton, whereas in July, the ARA index remained at around 115 dollars per ton (about 470 PLN per ton).
In depots, there is a sense of humility after last year’s price shock. Everyone remembers the huge alarm when coal depots priced a ton of hard coal (the most sought-after eco-pea coal) at PLN 3,500 to 4,000, or even more. Since then, the owners of these depots have calmed down, and prices are now, on average, at least half as low.
The decline in prices was largely influenced by the government’s municipal supply program, where coal was provided by municipalities at a price capped at 2,000 PLN per ton. Another important factor was the successful strategy of the Polish Mining Group S.A., which decided to break away from its previous authorized sellers due to their reluctance to lower prices. The new model introduced by the Polish Mining Group allowed anyone in the country to buy bulk coal directly from their mines via the internet, without intermediaries, and at producer prices. This move caused a revolution in the Polish coal market, as it eliminated the traditional distribution model based on intermediaries and significantly reduced costs for individual customers.
The prices of coal in Polish deposits are now influenced by the prices set by the state-owned Polish Mining Group. Additionally, the controlled network of KDW significantly reduces transport costs to various parts of the country, making it the lowest possible or even zero.
The article also provides a detailed comparison of coal prices in different outlets, such as coal depots, shopping centers, and the Polish Mining Group’s online store. As a result of the changes and price adjustments, Polish coal is currently the most affordable and attractive option for customers in the domestic market.