MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE

Indicative Pet Coke Price

Indicative Coking Coal Price

Indonesian Coal News:

*The Energy and Mineral Resources Ministry has raised Indonesia’s annual coal production target to 695 million tonnes this year to cater to robust demand for the commodity. The country plans to export more than 74 % of the coal it mines this year, some 518 million tonnes, which the ministry said would mean record shipments. The respective production and export targets are up slightly from last year’s realized 687 million tonnes and 494 million tonnes, ministry data shows. The production realized last year exceeded the ministry’s target of 663 million tonnes, even though miners retained output during a month-long export ban in January and experienced operational disruptions during the year due to heavy rains.

*Indonesia launched the first phase of mandatory carbon trading for coal power plants. This is an initiative by the country to boost renewable energy and achieve net zero emissions by 2060. The first stage of a carbon trading mechanism will cover 99 power plants with a total installed capacity of 33.6 gigawatts directly connected to power grids owned by state utility Perusahaan Listrik Negara (PLN). Under the mechanism, power plants that emitted more carbon than their quota can buy carbon credits from plants with below-quota emissions or from renewable power plants.

Australian Coal News:

*Fitch Solutions expects Newcastle thermal coal prices to average $280 per tonne in 2023, down from the $US358 per tonne average of2022, Fitch Solution has said that global thermal coal consumption is expected to grow by 0.76 % year-on-year y-o-y in 2023, compared with the 4.5 % y-o-y growth achieved in 2022. According to the forecast for 2023 implies that prices are likely to get a boost from current levels in the coming months, as energy needs increase in summer and later during winter months.

*In a massive fall, Australian 6,000 kcal/kg NAR and 5,500 kcal/kg NAR thermal coal prices dropped by more than 40% in February and more than 35% in January respectively from September last year. The NSW government recently announced its plans to ask coal producers to reserve up to 10% of their output for domestic use in mid-January. However, it made changes for individuals who have longterm contract obligations. Under the policy, sale prices will be capped at $125/t ($87/t).

South African Coal News:

*South African High-CV 6,000 prices rose above 135 USD/t driven by the growth in European demand, logistical constraints and increased demand from Indian consumers. According to reports, exports through South Africa’s Richards Bay Coal Terminal (RBCT) dropped to 7.1 m /t in the first two months of 2023. In addition, last week the visit of the President of South Africa to an event led to a traffic jam of trucks (about 2,000 units) on their way to the RBCT terminal. In this regard, the operator Transnet has sent a notice to shippers, asking them to suspend supplies for at least 48 hours.

*In South Africa, experts believe that the global energy crisis has led the coal value chain to gain momentum both domestically and globally. The challenges and delay in the arrival of alternative fuel sources will allow coal to stay for a longer period. The coal industry is working with Transnet to get the fossil fuel to the port as currently, the export of coal is a relevant and profitable business. The country has not been successful in terms of the growth of renewables as they are taking a long time to arrive. The country is also looking at innovative technologies to clean up its coal fleets.

European Coal News:

*Imports of Europe’s seaborne thermal coal are declining, and as per the estimation of Kpler, February will see arrivals of 6.61 million tonnes of coal, down from 8.16 million in January and 8.75 million in December. The sharp drop is the consequence of a mild winter and an adequate stockpile of natural gases limiting the need for coal-fired generation. However, it should be noted that structurally, Europe’s thermal coal imports have moved higher due to the RussiaUkraine war with imports already being reported at 12% which is higher compared to the same month in 2022.

*The EU's use of coal-fueled power rose last year as countries faced a shortfall in energy supplies related to Russia's invasion of Ukraine, but the increase was not as high as many feared, according to a report. The development is partly due to a boost in renewable energy production, which generated a record 22 % of the EU's electricity last year. As EU countries scrambled to shore up fuel supplies after Russia cut off gas flows following its invasion of Ukraine and imposed sanctions on Moscow's coal and crude oil, some turned to coal power plants to replace lost supplies.

US Coal News:

*The fourth quarter of FY 2022-23 saw a drop in US coal exports by 4.7% from the prior-year quarter, as per S&P Global Market Intelligence data. The single largest buyer of U.S. coal in the quarter was India, which received 3.5 million tons of coal from U.S. producers, an increase of 25% over the 2021 fourth quarter. Other large coal buyers, including the Netherlands and Brazil, also increased deliveries of U.S. coal in the quarter. Coal producers have said that US export markets had proven lucrative in recent months.

*Industry experts in the US are of the opinion that coal has been on its way out for the last decade, but there is no way that it will disappear any time soon. In spite of market conditions and environmental regulations U.S. coal power has proven exceptionally hard to kill. The Biden administration is preparing for a spring offensive against coal plant pollution. The U.S. Energy Information Administration said last week that coal accounted for 20 % of U.S. electricity generation in 2022. In 2007, coal was the source of half the electrons on the U.S. power grid.

Pet Coke News:

*With the return of Indian buyers, the US weather, and maintenance leading to a drop in supply, petcoke prices are also rising. The 6.5 % S petcoke FOB contract sold at US$131 while the 6.5 % S petcoke CIF ARA contract sold at US$143. Resistance is to be found at US$145, 180, and 215, while support is around US$125,

115, 100, and 85. Multi-year support is found at US$36. The discount for 6.5 % S petcoke FOB sold at US$131 is 39 % when compared with 2Q23 API4 coal sold at US$171.

*Petcoke prices saw a sharp rise despite the declining coal prices. The prices were impacted by low supply and falling freight rates. China is awaiting the impact from coal and many cement buyers are increasingly turning towards relatively cheap coal as the discounts now are in the expensive zone. The USGC FOB 6.5 % sulphur (S) contract is up eight % MoM to $136, with the discount to API4 dropping from 39 to 25 %. The USGC CFR ARA 6.5 % S contract rose by 3 % MoM to $153.50, as freight rates dropped to $16.50 and the discount fell to 13 %.

Shipping Update:

*The Baltic Exchange’s main sea freight index fell as rates for larger vessels dipped to multimonth lows. The overall index for capesize, panamax and supramax shipping vessels, was down 22 points, or 3.9%, at 541, the lowest since early June 2020. The capesize index dropped 65 points, to over a five-month low of 317. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $537 to $2,630. The panamax index fell 18 points, or about 2.1%, to 830, its lowest since June 11, 2020.

*Shipments of Australian coal move to China in a sign of improving bilateral ties between the two countries. Over 630,000 tonnes of coking and thermal coal were loaded across six vessels in eastern Australia in the past two weeks bound for Chinese ports in late January and early February with Beijing further easing its informal coal ban. According to the data from S&P Global Commodities, vessels Tiger East and Magic Eclipse carried two of those consignments that arrived at their respective southern Chinese ports of Guangzhou and Zhanjiang.