Analysts expect the benchmark Newcastle coal index to average $175-$212 a tonne this year, a steep premium to the $86 average for the ten years preceding Russia’s 2022 invasion of Ukraine, but down more than 50% from September’s highs at $440.

Last year, punitive Western sanctions on Russia pushed European buyers to pay top dollar for fuel to fire power plants, pushing up global prices. Russia was Europe’s biggest supplier of coal and natural gas before the war.

Coal prices in the tighter range expected this year, though, will help utilities and other users better plan fuel purchases, easing pressure on economies battling high inflation. Fuel prices typically account for more than half the total cost of generating electricity.

Alexandre Claude, chief executive of London-based analytics firm DBX Commodities, said he expects lower volatility in 2023 compared with 2022 because trade flows had stabilised after the “energy shock” that followed the invasion of Ukraine.

Argus Consulting expects global coal exports to rise 4.4% this year, with imports set to increase 5%. China is seen ramping up imports by 11%, with Australian exports rising 9.4% after declining for three straight years.

July Ndlovu, chairman of the World Coal Association (WCA) and chief executive of South Africa’s Thungela Resources , said Europe’s “disproportionate” role in deciding coal prices was over.

“Going forward … what happens with China and India is what would drive the fundamentals for energy, because that’s where growth and energy demand is,” Ndlovu told Reuters.

Australia’s Westpac said this month it expects the Newcastle benchmark to average $193 per tonne over the nine months ending December 2023, while Citi said in April it expected the index to average $175 over 9-12 months. Australia’s chief economist expects Newcastle benchmark prices to average $212 this year.

As of Monday, Newcastle coal CO-FOBNWC-AU was just over $159 a tonne on a free-on-board basis, at the low end of a $159-$179 range it has held during the current quarter and a long way from the $180-$403 band of the first quarter.

“We expect coal prices including the Newcastle benchmark to remain supported mostly due to higher cash (production) costs for the coal miners,” said DBX’s Claude, explaining why prices likely aren’t headed back to pre-invasion, pre-pandemic levels.