Metals Movers (Argus series within Argus Media feed)
Korea Commodities Market Highlights Episode 4
Metals Movers (Argus series within Argus Media feed)
•February 25, 2026•3 min
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Metals Movers (Argus series within Argus Media feed)•Feb 25, 2026
Why It Matters
Understanding these market dynamics is crucial for investors, utilities, and policymakers as South Korea balances coal reliance with aggressive renewable targets and regulatory changes. The episode underscores how supply constraints, policy caps on Russian coal, and large‑scale renewable projects will shape the region's energy security and decarbonisation trajectory in the coming decade.
Key Takeaways
- •Thermal coal price drops to $92.12/tonne.
- •KWIPO tender seeks 1.68M tonnes, excludes Russian, Chinese coal.
- •Russian coal remains 24% of imports despite cap.
- •Coepo aims 3.9GW renewables by 2030, 14.5GW by 2040.
- •Refinery turnarounds to tighten gasoline, jet fuel supply
Pulse Analysis
The week’s coal market in South Korea showed modest price pressure, with high‑calorific‑value thermal coal slipping to $92.12 per tonne, a $0.50 decline driven by subdued spot trading. Korea Western Power (KWIPO) launched a sizable tender for up to 1.68 million tonnes of coal for delivery between 2026 and 2030, explicitly limiting suppliers to Indonesia, Australia or Canada and barring Russian and Chinese cargoes. Despite the Ministry of Climate and Energy’s recommendation to cap Russian imports at roughly 10 % of annual volumes, Russian coal still accounted for about 24 % of total thermal coal imports last year, highlighting the commodity’s lingering price competitiveness and logistical challenges.
South Korea’s energy transition gained momentum as Coepo announced an aggressive renewable expansion, targeting 3.9 GW of new capacity by 2030 and 14.5 GW by 2040, aligning with the national coal‑phase‑out goal. The utility is advancing wind and solar projects while replacing the retired Tehen 1 coal unit with a 500 MW combined‑cycle gas plant slated for completion this year. Internationally, a clean‑energy cooperation pact with Sweden was signed, focusing on renewable development, grid integration, storage and small modular reactors. Domestically, the government launched a £25 billion decarbonisation auction, reserving 30 % of funds for SMEs and keeping the fuel‑adjustment rate frozen for the 15th quarter, stabilising KEPCO’s revenue.
Downstream operations face tightening supply as South Korea’s major refiners schedule extensive maintenance turnarounds in March and April. S‑Oil will idle its 260,000‑bpd crude distillation unit, GS Caltex expects a prolonged vacuum residue hydrocracker outage, and SK Energy and Hyundai Oil Bank will also undergo shutdowns, tightening regional gasoline, gas‑oil and jet‑fuel availability this spring. In the base‑oil market, 2025 export volumes remained flat, slipping only 1 % year‑on‑year, while December shipments surged, with India absorbing 29 % of total exports. These dynamics underscore Korea’s balancing act between legacy fossil‑fuel infrastructure and accelerating clean‑energy commitments.
Episode Description
South Korean thermal coal prices dipped slightly amid quiet trading, while major utilities issued large tenders and received guidance to limit Russian coal to about 10% of imports. Weather‑related delays tightened inventories. Wood pellet prices weakened on soft demand. Korea advanced its energy transition with major renewable expansion plans, a new clean‑energy pact with Sweden, and a 25‑billion‑won decarbonisation auction. Electricity prices were frozen despite high winter demand. Refiners prepared for significant spring maintenance that may tighten fuel supply. Base‑oil exports were stable year on year.
Show Notes
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