UBS warns potential 'super El Niño' could tighten thermal coal markets and lift prices
Key takeaways
- The World Meteorological Organisation expects an El Niño event to develop in the coming months, and some scientists predict it could be the strongest this century based on high Pacific Ocean surface temperatures.
- With global power systems already under strain from the US-Iran conflict, UBS sees a risk that the weather event could compound existing supply pressures.
- Fortescue was more mixed, with solid haematite shipments offset by disappointment at its Iron Bridge magnetite project, leading to a guidance downgrade.
UBS warns potential 'super El Niño' could tighten thermal coal markets and lift prices Proactive Tue, May 12, 2026 at 6:30 PM GMT+7 2 min read RIO UBS warns potential 'super El Niño' could tighten thermal coal markets and lift prices Proactive uses images sourced from Shutterstock UBS has flagged the risk of a "super El Niño" developing from mid-2026, which it says could tighten the seaborne thermal coal market and push prices higher, with Indonesian and Australian producers set to benefit.
The World Meteorological Organisation expects an El Niño event to develop in the coming months, and some scientists predict it could be the strongest this century based on high Pacific Ocean surface temperatures.
UBS said such events typically trigger intense and prolonged heatwaves across Asia, where coal-fired plants account for roughly 70% of electricity generation in India and around 55% in China and across the region more broadly.