Thermal coal: Correlation
Prices it moves with, and why
Seaborne thermal coal, benchmarked at Newcastle in Australia, is priced by power demand in China, India, Japan and South East Asia, by competing gas prices and weather, and by Chinese and Indian domestic output, import policy and freight costs.
Market price World Bank Pink Sheet: Coal, Australian $/mt · monthly, Jan 2006 to Sep 2026What its price moves with
Selected linkThermal coal and Natural gas
Monthly changes 0.37 weak correlation 12-month changes 0.81 strong correlation Last 5 years 0.47 monthly changes Lead or lag none No clear lead or lag Price function, Jan 2006 to Sep 2026 Thermal coal ≈ 24.2 × (Natural gas)0.62 R² 0.58 On this fit, a 10% higher natural gas price goes with a 6.1% higher thermal coal price over the long run. Units: $/mt and $/mmbtu.Chart: Thermal coal and Natural gas prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: Thermal coal price against Natural gas price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Utilities in Asia and Europe burn more coal when gas is expensive, which lifts coal prices; the 2022 gas shock sent both to record highs. Monthly moves correlate only weakly, at 0.37, but yearly moves strongly, at 0.81.
weak co-movement month to month · 249 months Show chartsOil and coal share the global energy and industrial cycle, and diesel is a large mining and haulage cost for coal producers. The tie is moderate: monthly changes correlate at 0.33 and yearly changes at 0.70, a common driver rather than a direct input.
weak co-movement month to month · 249 months Show chartsMuch of China's aluminium is smelted with captive coal-fired power, so dear coal raises smelting costs and supports aluminium prices. Monthly moves correlate at 0.38 and yearly moves at 0.59, partly through the shared Chinese industrial cycle.
weak co-movement month to month · 249 months Show chartsChina makes most of its methanol by gasifying coal, so coal sets the marginal cost of the largest methanol producer. The proxy is a broad US organic chemicals index, which correlates at 0.17 monthly but 0.76 yearly with coal, mostly through the shared energy cycle.
little or none co-movement month to month · 249 months Show chartsCoal is bulky and cheap per tonne, so rail and sea freight make up a big part of its delivered cost, and rail haulage rates often carry fuel surcharges. The proxy, a US rail freight index, correlates at 0.22 monthly and 0.66 yearly with seaborne coal.
weak co-movement month to month · 249 months Show chartsCoking coal is a higher grade used to make coke for steel; it is mined in the same Australian basins and shares rail and port capacity. This site uses the thermal coal price as the coking coal proxy, so no separate statistics are shown.
Not enough overlapping price history to measure.How to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.