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China's energy crisis sees the world's top emitter investing in more coal
The energy crisis has seen Beijing shift its political discourse and proclaim energy security as a more urgent national mission than the green energy transition. Now, the government is investing in a new wave of coal-fired power stations to try to meet demand. In the first quarter of 2022 alone, China approved 8.63 gigawatts of new coal plants and, in May, announced C¥ 10 billion (A$2.1 billion) of investment in coal power generation. What's more, it will expand the capacity of a number of coal mines to ensure domestic supply as the international coal market price jumped amid Russia's invasion of Ukraine.
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China is responsible for around a third of global carbon dioxide emissions, which makes this latest rebound to fossil fuels a climate change emergency. In 2021, China's CO₂ emissions rose above 11.9 billion tonnes—their highest level in history and dwarfing those of other countries. And according to the International Energy Agency, rapid GDP growth and electrification of energy services caused China's electricity demand to grow by 10% in 2021. This is faster than its economic growth at 8.4%. China had been attempting to reduce its dependency on coal for decades, with the growth of coal consumption gradually flattening from 2014.
China Daily Average Coal Output Jumped 19.4% YoY during August 1-17
According to the National Energy Administration, from August 1st to 17th, the national coal output was 210 million mt, with an average daily output of 12.33 million mt, a year-on-year increase of 19.4%. Power plants held more than 170 million mt of coal inventory, allowing coal-fired power units to run at full capacity. From January to July, the national coal output was 2.56 billion mt, a year-on-year increase of 11.5%. Among the 23 coal-producing provinces and regions, 18 provinces and regions achieved an increase in production. The four key coalproducing provinces, namely Shanxi, Inner Mongolia, Shaanxi and Xinjiang, increased their production by a combined 240 million mt, accounting for 91% of the increase across the country.
Indonesia to raise coal and gold royalty rates next month
The world's top thermal coal exporter Indonesia will raise its royalty rates for some coal miners starting Sept. 14, with a progressive system based on mine types, coal benchmark prices and calorific value, according new rules made public on Friday. Indonesia will charge a range of rates from 4% to 13.5%, according to the regulation, up from a 2% to 7% range under previous rules. The Indonesia Coal Miners Association executive director Hendra Sinadia said the new royalty rates will be applicable to holders of coal mining licenses known as IUP and the group is studying the impact of rate changes to businesses. The resource-rich country has introduced several rules this year to get bigger revenues from the commodity sector amid an upward cycle in prices. It has already raised coal royalty tariffs for holders of older coal mining permits. The regulation also showed authorities would waive royalty payments for coal used in its downstream sector. Under the new regulation, Indonesia will also hike the ceiling for the gold royalty tariff to 10% when the price of the precious metal hits at least $2,000 per ounce.
Indonesia revokes thousands of mining permits covering over 3 million hectares – wants ‘new entrepreneurs’
Indonesia’s investment minister said more than 2,000 mining permits for various minerals have been revoked amid efforts to tighten the sector’s governance and plan for land redistribution. The ministry has revoked 2,065 permits covering more than 3.1 million hectares (7.66 million acres) of land across the country, Investment Minister Bahlil Lahadalia told reporters on Friday. President Joko Widodo in January ordered thousands of mining, plantation and forest-use permits to be revoked due to non-compliance or because they had not been used. Of the total number of permits that have been revoked, 306 were coal mining permits, 307 were for tin mining, and over 100 were for nickel mining, Bahlil said, adding that dozens of bauxite, copper and gold mining licenses have also been revoked. Vietnam to increase coal imports in 2025-2035 period: Ministry
Vietnam’s coal imports are forecast to rise to meet domestic production demand, according to a draft strategy for developing the coal industry in Vietnam recently introduced by the Ministry of Industry and Trade (MoIT). Accordingly, Vietnam will import about 50-83 million tons of coal per year during the period from 2025 to 2035, with the volume gradually falling to about 32-35 million tons by 2045.
The data from the MoIT shows domestic coal consumption increased rapidly from 27.8 million tons in 2011 to 38.77 million tons in 2015, and about 53.52 million tons in 2021. The volume of coal consumed at present has more than doubled compared to 2011, mainly for electricity production. The demand for primary energy, including coal, will continue to increase, possibly peaking in the 2030-2035 period, the ministry said. Vietnam's coal demand will be around 94-97 million tons in 2025, and peak at 125-127 million tons in 2030, mainly due to the increase in demand for power generation, and the cement, metallurgy and chemical industries
Adani mine ramps up production amid surging coal, energy prices
The Adani Carmichael coal mine in central Queensland has ramped up to commercial production just as surging coal and power prices send earnings soaring for the ASX’s energy sector. Financial accounts for the mine’s owner, Adani Mining Pty Ltd, report that the group sold $32.5 million worth of coal up to March 31 this year, having made its first coal shipment in January. The company said these sales represent “test production revenue generated prior to the commencement of commercial production of the mine. The Carmichael Mine is ramping up to export in the order of 10 million tonnes per annum.” Earnings season has provided some jawdropping results from the ASX’s biggest energy groups with Whitehaven Coal reporting a 215 per cent rise in revenue for 2022 to $4.9 billion, and a 2,300 per cent rise in net profit to $1.95 billion.
. . Yancoal diverts high-ash Australian coal from India
Chinese-owned producer Yancoal has diverted Australian coal sales from India to Europe and Asia, with market conditions allowing it to sell its lower-grade coals to destinations that typically take only high-calorie thermal coal. Yancoal's sales to India fell to 9pc of the total in January-June from 23pc in the year-earlier period, while sales to Europe rose to 9pc from 1pc and sales to Vietnam gained to 7pc from 3pc, according to the firm's half-year financial report. Yancoal cut its sales of metallurgical coal to 2.4mn t in January-June from 3.1mn t in JulyDecember 2021 and from 2.7mn t in JanuaryJune 2021, as it focused on higher margin high-grade thermal coal over metallurgical coal production where feasible. Yancoal last month cut its coal production guidance for 2022 to 31mn-33mn t from 35mn-38mn t. But the firm is on track to make record profit this year, driven by high coal prices. Yancoal expects changes in trade flows, as a result of European buyers seeking alternatives to Russian supply on the back of the embargo following the invasion of Ukraine.
Australian and Indonesian thermal coal tread contrasting price paths: Russell
The spot price of benchmark Australian thermal coal is continuing to hold near record highs above $400 a tonne, but the price for Asia's other main type of the coal used to generate electricity isn't performing nearly as well. Singapore-traded contracts for Indonesian thermal coal with an energy value of 4,200 kilocalories per kg (kcal/kg) ended at $75.47 a tonne on Wednesday. Contracts for Newcastle coal with a calorific value of 6,000 kcal/kg ended at $412.60 a tonne on Wednesday on the ICE exchange. This is below the all-time high of $440 a tonne reached on March 2 in the wake of Russia's Feb. 24 invasion of Ukraine, however, the price is 170% higher than it was at this time in 2021 and some 770% above the level from the same day in 2020.
Prior to the invasion of Ukraine, Indonesian coal was at $76.96 a tonne, a discount of 67.6% to the $237.70 for Newcastle futures. Even adjusting for the difference in energy value still shows a massive gap between the two grades of coal, with Indonesian coal coming in at $17.97 per 1,000 kcal/kg, while Newcastle is at $68.77.
Met coal discounts spur Australian switch to thermal
Australian producers of hard coking coal and pulverised coal injection (PCI) grades are joining semi-soft coking coal mining firms in switching to thermal coal output, taking advantage of the extraordinary price premium for the power generation fuel. Hard coking and PCI coal prices fob Australia from the start of June slipped below that of high-grade thermal coal fob Newcastle. This extremely unusual met coal discount to thermal has continued to widen on weaker demand for met coal and scarcity of non-Russian thermal coal, with thermal coal now priced at around double that of premium hard coking coal. Premium hard coking coal has historically often been double the price of high-grade thermal coal, offsetting the higher cost of mining and washing the metallurgical coal. Even at price parity mining firms will often receive a bigger margin for selling unwashed coal as thermal rather than carrying out processing to make coking coa.
South Africa: EU imports of coal surge eight-fold, replacing Russian fossil fuels
European countries, which previously imported 45% of their coal from Russia and have been switching away from expensive natural gas to coal, ahead of the ban, started to source the fossil fuel from other countries. That has included Colombia, Australia and the United States and also South Africa. Thungela, a leading South African coal exporter said Europe was competing with Asia for South African coal. The Netherlands, Germany, Poland, Denmark, France, Italy and Ukraine are among European countries were importing growing quantities of coal from South Africa. In the first five months of this year, European countries imported more than 3 million tonnes of coal from South Africa. This is over 40% more than the total volume in 2021. The figures from. South Africa’s Richards Bay Coal Terminal (RBCT) showed it delivered 3,240,752 tonnes of coal to European countries by end-May this year, 15% of RBCT’s overall exports, up from 2,321,190 (4%) in 2021.
European coal demand boosts Exxaro profit despite rail woes
South Africa's Exxaro Resources reported a 26% rise in half-year profit driven by higher coal prices, but rail capacity problems limited its ability to take advantage of strong European demand. Exxaro said demand from Europe, which started to rise in late 2021 as customers switched from expensive natural gas to coal, had intensified after Russia's invasion of Ukraine in February and ahead of a ban on Russian coal, which came into effect this month. Europe's share of Exxaro's exports grew five-fold during the second half of 2021 to 32% in the first half of 2022, becoming the company's single biggest export market. South Africa's coal sales to Europe rose eight-fold during the first half of 2022 compared with last year, leading exporter Thungela Resources said. However, South African coal miners' capacity to export has been limited by deteriorating rail infrastructure. Despite the higher export prices, Exxaro exported 2.5 million tonnes of coal in the first half, down from 4.1 million tonnes a year earlier. However, the average export price rose to $262 per tonne from $117, resulting in a 48% jump in revenue to 22.3 billion rand ($1.34 billion).
Many European countries plan to burn more coal this winter due to the energy crisis, according to the Secretary-General of the European Association for Coal and Lignite (Euracoal) Brian Ricketts.
Ricketts told Anadolu Agency that many European countries, including Germany, France, Italy, Spain, the Netherlands, Austria, Poland, Hungary, Czechia, Greece and the UK have the potential to generate electricity from coal, given that they can either reopen coal power plants or extend their operating period. Uncertainties caused by the Russia-Ukraine war have given rise to unprecedented gains in natural gas and electricity prices and coal prices have not escaped, quadrupling over the last year to as high as over $400 per ton. Ricketts anticipates that coal prices for September future contracts in European markets, which are currently trading at $405 per ton from $100 in this period last year and $60 a year earlier, would not sustain at this level. Russia was the country that supplied the most coal to EU countries, marking about 25% of its coal exports. The EU was dependent on Russia for 45% of its coal imports and 70% of its thermal coal supplies.
EU coal terminal stocks rise to near 3-year high
Coal inventories at northwest European ports have risen 2% on the week to their highest since October 2019 amid continued restrictions to inland barge shipping and an influx of seaborne arrivals, data showed on Tuesday. Combined inventories at four key Amsterdam, Rotterdam and Antwerp (ARA) terminals were assessed this week at 7.17m tonnes, up 0.13m tonnes on the week, according to data compiled by Montel. Despite buoyant German coal-fired plant demand – as generation margins remain attractive for utilities – barge operators have had to reduce the volume of coal carried along the waterways as hot weather depleted river levels, thereby resulting in swelling port stocks. Although levels had recently recovered somewhat, the main waterway indication point at Kaub, on the Rhine, was expected to drop from nearly 130 centimetres at present to just 93cm by the weekend, according to Germany’s Electronic Waterways Information Service
Germany to prioritise coal and oil freight amid energy crisis
The German government has approved legislation that will require train operators to prioritise carrying mineral-oil products and hard coal destined for power generators over other freight and passengers. The legislation – drawn up by the economy ministry – is in response to an Energy Supply Assessment that warned of possible disruptions in supplies to coal power stations, which have been exacerbated by transport waterways drying up due to recent droughts. Around a third of Germany's coal imports travel through the River Rhine, but barge loads have had to be reduced – sometimes by up to threequarters – to reduce the weight and avoid vessels running aground. Disruptions have already occured. Earlier this week, a ship transporting coal to Germany became stuck in the River Waaldue to low water levels, the second time this has happened in a matter of days. The government’s energy supply assessment commented: "Due to reduced domestic shipping, accumulated coal stocks could quickly fall
Mined Anthracite Coal Market to Reach US$ 74.3 Bn by 2031, Observes TMR Study
In 2021, the value of global mined anthracite coal market stood at US$ 61.5 Bn. The global market is likely to develop at a CAGR of 1.97% during the forecast period, from 2022 to 2031. The global mined anthracite coal market is anticipated to attain value of US$ 74.3 Bn by 2031. A radical movement in the anthracite coal mining market for natural resources can be seen in how suppliers and producers are shifting supplies to local consumers and focusing on imports. Steel is often produced using anthracite coal owing to its affordable price and high carbon content. This is expected to drive future of mined anthracite coal market. The increase in use of anthracite coal in the construction, industrial, and infrastructure sectors is a key factor influencing growth of the market for mined anthracite coal. The mined anthracite coal market for mined anthracite coal is also being boosted by the steel industry's tremendous rise in anthracite coal consumption. Since anthracite coal has a similar carbon content to coke and is less expensive, steel producers are concentrating on utilizing it more frequently than coke. This is likely to lead to more production of cost-effective steel, thereby driving market demand for mined anthracite coal.
Venezuela Increases Petcoke Exports to India
Venezuela has significantly ramped up its petroleum coke (petcoke) sales to Indian companies. According to Reuters, cement companies in India received 160,000 tonnes of petcoke between April and July, with cargoes of at least 80,000 more expected in August. The Asian giant started importing Venezuelan petcoke in 2022 after previously relying on the US and Saudi Arabia as suppliers. The Venezuelan exports have hovered around US $220 per tonne, some 5 to 10 percent below market price, as Caracas seeks international trade partners while heavily targeted by US sanctions.
India uses an estimated 27 million tonnes of petcoke per year and is the world’s largest consumer. Indian corporations Ramco Cements, JSW Cement and Orient are among the main purchasers of Venezuelan coke. The estimated 300,000-400,000 tonne-per-month petcoke sales provide some relief as the country’s crude production stagnates under the weight of crushing US sanctions.
US coal exports rise in Q2'22 amid global energy crisis
U.S. coal exports rose in the second quarter as demand and prices remained elevated amid a global energy crisis. Shipment volumes increased 14.8% quarter over quarter to 21.6 million tonnes and climbed 4.6% year over year, according to S&P Global Market Intelligence data.
Asia and Europe received the most coal shipments from the five largest ports in the U.S.: Norfolk, Va.; Baltimore; New Orleans; Mobile, Ala.; and Seattle. Other destinations for U.S. coal exports included South America and Africa. All coal shipped through Seattle during the second quarter went to Asia. Seven of the top 10 U.S. ports for coal exports recorded higher shipments year over year, while coal exports from eight ports grew from the previous quarter. Exports from Norfolk, which ships more coal abroad than any other U.S. port, increased 5.8% year over year and jumped 6.4% compared to the first quarter. The ports in Buffalo, N.Y., and Cleveland booked significant increases quarter over quarter, soaring 254.6% and 419.3%, respectively.
