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Global seaborne coal trade rose 5.7% in 2021, importers say

Global seaborne coal trade rose by 5.7% last year, driven by rising demand from steelmakers for coking coal and its products as economies began to recover from the coronavirus crisis, Germany’s VDKi coal importers lobby group said.

Imports and exports of hard coal across the globe stood at 1.180 billion tonnes in 2021, up from 1.116 billion in 2020, the Verein der Kohlenimporteure (VDKi) estimated.

Trade in coking coal rose by 6% to 903 million tonnes while that of steam coal for power stations was up 4.9% at 277 million tones. Strong demand came out of Asia, with notable growth rates in smaller economies such as Malaysia, Thailand and Vietnam, adding to China and India’s overriding hunger for imported energy.

Among exporters, Russia and the United States exceeded export volumes of pre-pandemic 2019. Only 17% of hard coal consumed globally is traded internationally.

In Germany, Europe’s biggest importer, shipments in 2022 could rise by 7.7% to 42 million tonnes after rising by 24.5% last year, VDKi noted.

Global coal-fired power generation to reach an all-time high in 2021: IEA

With electricity demand outpacing low-carbon supply, and with steeply rising natural gas prices, global coal-fired power generation is estimated to have increased by 9 percent in 2021 to hit an all-time high, the International Energy Agency (IEA) said in its latest report.

Paris-headquartered IEA estimated global coalbased power generation at 10,350 terawatthours (TWh). However, coal’s share of the global power mix in 2021 is expected to be 36 percent, around 5 percentage points below its 2007 peak. In the United States and the European Union, coal power generation is forecast to increase by almost 20 percent in 2021 but will not reach 2019 levels.

By contrast, the estimated growth of 12 percent in India and 9 percent in China will push coal power generation to record levels in both countries. Taking into account the rebound in global industrial output, overall coal demand worldwide is expected to grow by 6 percent in 2021, bringing it close to the record levels it reached in 2013 and 2014.

Meanwhile, the decline in global coal-fired power generation in 2019 and 2020 led to expectations that it might have peaked in 2018. But 2021 dashed those hopes, the IEA report said.

Coking coal futures hit record high as prompt contract sees contango

Coking coal futures on the Singapore Exchange hit all-time record highs supported by stronger Australian and global prices for the crucial steelmaking commodity around tight coal supplies and recent disruptions to logistics in North America.

Contracts surged Jan. 14 with prompt February 2022 rebounding to $415.75/mt at the close in Singapore, from $412.75/mt in the previous session.

Front-month futures continued to exceed the benchmark S&P Global Platts spot premium HCC FOB Australia index, at a record of $409/mt on Jan. 14, with futures outpacing spot physical index prices for the sixth straight session.

The forward curve has seen more support in front-month contracts, moving into a prompt contango structure from backwardation at the front of the curve earlier this month and in December. In a contango, later-dated prices are higher than prices for prompt loading, or delivery, with the inverse of higher prompt prices seen in a backwardated market.

Demand for Canadian, US and Russian coking coal had earlier tightened up Atlantic and Asian markets during lower availability from Australia, as miners adjusted production to meet contracts and BHP conduced maintenance at coal processing plants in the second half of 2021.

Indonesia's coal ban sends prices soaring, other exporters fail to step up: Russell

Indonesia's short-lived ban on exporting coal has sent frictions through the seaborne market for the fuel in Asia, with the fallout likely to last beyond the initial shortage of available cargoes.

The short-term impact of the sudden ban announced on Jan. 1 by the world's largest exporter of the polluting fuel was to send prices for cargoes from other major shippers soaring back toward last year's record highs. The longer-term impact is that the key planks of being cheap and reliable, promoted by the coal industry in its battle for survival against cleaner energy alternatives, are seriously undermined.

With coal in short supply it's not surprising that prices have rallied, with the benchmark Australian thermal coal price, the Newcastle Port Weekly Index , as assessed by commodity price reporting agency Argus, surging to

This is up 59% from the recent low of $153.10 a tonne in the week to Nov. 12, and the price is closing in on the record high of $252.72, reached in the week to Oct. 15.

There have been reports of a Newcastle cargo changing hands at more than $300 a tonne, which if confirmed would show the desperation of some buyers to secure coal.

Russian coal prices at the eastern port of Vostochny have also surged, with IHS McCloskey assessing cargoes at $233 a tonne last week, up from recent lows around $155 in mid-November. South African thermal coal for export from Richards Bay has also gained, rising to $162.58 a tonne last week from the recent low of $125.35 at the start of 2022.

Indonesia allows more producers to export coal

As many as 32 coal producers have been permitted to export coal, the country's energy ministry (ESDM) said. These producers have agreed to fully meet the domestic market obligation (DMO) norms for the last year and pay a penalty for the failure to comply with the regulation, the ESDM said. Under the DMO, suppliers have to dispatch at least 25pc of their output to the domestic market.

The permission accorded to these producers is the result of an ongoing evaluation on the fulfilment of DMO rules by Indonesian miners over the last year. The ESDM is evaluating 2021 sales of over hundreds of more miners.

The latest decision follows last week's move to permit 139 coal producers, which fully met the DMO norms for last year, to export coal. The decision could increase supplies in the seaborne coal market in coming weeks. But uncertainties surrounding Indonesia coal's price outlook may continue until a final decision is taken.

Argus last assessed Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) coal on 21 January at $60.66/t fob Kalimantan. The prices hit a historical high of $154.21/t fob Kalimantan on 22 October 2021, from a historical low of $22.40/t on 11 September 2020.

Indonesia’ s Domestic coal utilization to reach 166 mln tons in 2022

Jakarta - The Ministry of Energy and Mineral Resources has projected that domestic coal utilization will increase by 33 million tons to reach 166 million tons in 2022 from 133 million tons in 2021.

At least 166 million tons of coal will be mostly used for electrical power plants, the ministry's Secretary General Ego Syahrial informed.

"The coal produced will mostly be converted to electric power. It will also be used in industries and households, he said at the Indonesia Economic Outlook 2022 event.

Coal utilization must pay attention to environmental issues, such as high-carbon emissions that have a deteriorating impact if mining regulations are not carried out properly, he added.

Meanwhile, the Indonesian government will encourage coal downstreaming as the country's coal potential is considerable, he added. One of the projects for coal downstreaming involves the development of dimethyl ether as a replacement for liquefied petroleum gas (LPG), he noted.

China releases Australian coal from its ports

China has cleared most of the Australian coal that had been held at Chinese ports due to a coal import ban, according to Fengkuang Coal Logistics.

The data released by the General Administration of Customs of China on January 21 shows that

5.6 million tonnes of Australian coking coal that was detained in Hong Kong – including 706,000 tonnes in October, 2.67 million tonnes in November, and 2.42 million tonnes in December – has been released.

China has historically been reliant on Australian high-grade coking coal, however, in the wake of the import ban, China has turned its sights to North America.

Throughout 2021, China imported 9.29 million tonnes of US coking coal, a 977.4 per cent increase on the previous year, taking its coking coal imports to 18.7 per cent of China’s imports, according to Fengkuang Coal Logistics.

In December, the import volume of Canadian coking coal increased by 23 per cent from the previous month to 1.11 million tonnes.

In 2021, the cumulative import of Canadian coking coal was 8.4 million tonnes, an increase of 98.62 per cent from 2020. The import volume almost doubled, and the import share of Canadian coking coal accounted for 16.9 per cent, whereas Australia’s coking coal imports accounted for 11.3 per cent.

China’s met coal prices seen bearish, demand to dip on year – sources

China’s metallurgical coal prices are expected to remain bearish in 2022, with demand falling 2.9% below 2021 levels, industry sources said.

Guangdong-based Hongyuan Futures said China’s 2022 average met coal prices are expected to dip below Yuan 2,000/mt ($314/ mt).

In the early part of 2022, prices will likely remain soft mainly because of the Winter Olympics that starts in February, while prices will continue to be volatile ahead of two important national meetings occurring in the year, according to Hongyuan Futures.

Price volatility is likely throughout the year amid fluctuating demand from the infrastructure sector, which could be impacted by the steel industry’s production cap measures, according to Hongyuan Futures.

Guotai Junan Futures sees 2022 domestic coking coal futures prices moving in the range of Yuan 1,200-2,200/mt, and added that met coal demand would not rise much in 2022 on a potential output cap in China’s crude steel sector.

Vietnam: Coal sector sees positive prospect in 2022

With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomin) will capitalise on advantages and turn challenges into opportunities, said its Chairman of Member Council Le Minh Chuan.

Vinacomin will push ahead with set plans to carry out the Government’s action programme for the implementation of the Politburo’s Resolution No.55-NQ/TW dated February 11, 2020 on strategic orientations to national energy development till 2030 with a vision to 2045.

This year, Vinacomin sets the goals of earning 131.6 trillion VND (5.72 billion USD) in revenue, up 2 percent from 2021, contributing 18.1 trillion VND to the State budget and raking in 3.5 trillion VND in profit.

It will also strive to sell 43 million tonnes of coal, including 41.2 million tonnes at home and 1.8 million tonnes for export, exploit 39.1 million tonnes of coal and generate 9.6 billion kWh of electricity

Philippine chamber urges government deals for coal, more renewable

The Philippines’ largest business group said the government should look into negotiating deals

with other governments to ensure a sufficient supply of coal for the country’s energy needs.

PCCI also called the development of alternative sources of power supply, specifically solar and biomass, which could be deployed in viable sites, especially in the Visayas and Mindanao.

George Barcelon, PCCI president, said Indonesia’s recent move to restrict its coal exports showed how vulnerable the Philippines was to coal supply disruption. PCCI noted that the country imports nearly 70 percent of its coal.

He said policymakers should look into proposals for a government-to-government procurement or agreement, similar to the Reciprocity Agreement in 1973 where the Philippines helped Indonesia develop its geothermal technology in exchange for cheaper coal.

The business group however added that while renewable energy resources could be rapidly deployed in certain areas, coal is still critical to fuel the country’s economy because it is the most stable source of energy.

South32 warns of labour issues from pandemic as quarterly coking coal output falls

Australia's South32 (Jan 24) warned of potential impact from workforce restrictions due to the coronavirus pandemic at its flagship Illawarra project in the second half, as it reported about a 15 per cent drop in second-quarter coking coal output.

The diversified miner follows heavyweights BHP Group and Rio Tinto in warning of disruptions from coronavirus-induced labour shortages as Australia faces a surge of Omicron cases.

"The COVID-19 pandemic continues to impact our operations and supply chains in different ways, across our global portfolio," the miner said.

While it maintained its fiscal 2022 metallurgical coal output guidance of 6.3 million tonnes (Mt), it said it will provide an update to its financial year 2022 and financial year 2023 forecast with its half-year results next month.

Glencore updates on Valeria coal resource option

Glencore is undertaking a range of studies related to the Valeria coal resource option in Queensland.

These studies and assessments will support the state and federal approvals process for the project, which is still yet to reach a final investment decision.

The development of any coal project, including Valeria, will take into account Glencore’s climate change strategy and stated emission reduction targets.

Glencore has committed to reducing emissions by 15% by 2026, 50% by 2035 and an ambition of being a net zero total emissions business by 2050.

In Australia, its Liddell, Integra and Newlands mines will be closed and rehabilitated within the next five years, and the majority of the company’s coal assets in Colombia and South Africa will come to the end of their economic lives in the early 2030s.

World’s largest coal port to be 100% powered by renewable energy

Port of Newcastle says move is part of plan to decarbonise the business by 2040 and ‘we don’t really have a choice’

The world’s largest coal port has announced it will now be powered entirely by renewable energy.

The announcement from Port of Newcastle comes as coal power generation in Australia’s

national electricity market fell to its lowest level in the final three months of 2021.

Though the port continues to export an average of 165Mt of coal a year, the move is part of a plan to decarbonise the business by 2040, and to increase the non-coal portion of its business so that coal only makes up half its revenue by 2030.

It has signed a deal with Iberdrola, which operates the Bodangora windfarm near Dubbo in inland New South Wales, for a retail power purchase agreement that provides the port with large scale generation certificates linked to the windfarm.

Stretched supply chains hit European coal availability

Strained coal supply chains in northwest Europe could limit deliveries to utilities during the peak winter heating season and spark a flurry of arbitration disputes relating to nonperformance of contracts.

Amsterdam-Rotterdam-Antwerp (ARA) market participants have warned that contractual obligations might not being fulfilled, either as a direct result of, or a knock-on effect from, rail constraints in Russia — Europe's largest coal supplier.

The exact tonnage under threat of nonperformance is unclear, but several supply chains are affected, including coal for some German utilities, participants said.

Russian producers have been struggling to access rail capacity to the northwestern ports that supply Europe's coal market for several reasons. These include freezing temperatures and storms, extended maintenance by staterun Russian Railways (RZD) and a shortage of railcars. The prioritisation of eastbound export deliveries to higher-paying Asia-Pacific buyers is another factor.

What limited Russian spot cargoes are available are changing hands at significant premiums to the API 2 index. Premiums for February-loading NAR 6,000 kcal/kg coal are in the low-$30s/t, with a cargo trading at a premium of $30.50/t on 18 January. A NAR 5,500 kcal/kg offspecification February-loading cargo changed hands at a premium of $34.90/t this week, although the destination is unclear.

Russia’s commodity exports in spotlight amid standoff with West

Russia’s exports of oil, natural gas and coal, a key source of revenue for the Kremlin’s coffers, have been in the spotlight in recent months against the backdrop of Moscow’s broader standoff with the West over military alliance NATO’s expansion.

According to Russian Energy Ministry, Russian coal output rose by 9% to 439 million tonnes in 2021. Russia exports around half of its coal production.

TASS news agency said, citing official data, Russian coal exports rose by 5.7% in 2021 to 214.37 million tonnes. Russia was the world’s third-largest coal after Australia and Indonesia in 2020. Its share in global coal trade accounted for 16% in 2020.

Key importer of Russian coal are China, South Korea and Japan, accounting for more than a half of Russia’s total coal imports.

German transport minister says we can’t exit coal without stepping up gas use

Germany cannot phase out coal-fired electricity generation without using gas to fuel the transition, transport minister Volker Wissing said at an energy conference recently.

“This is a challenge of similar dimension to moving to zero-neutral mobility,” the politician of the business-friendly FDP said during the annual Handelsblatt Energy Conference, adding there were no easy solutions for decarbonising individual sectors.

“Voters expect us resolve these questions and therefore everybody is responsible for

addressing and living up to the energy transition challenges,” said Wissing.

Polish coal production up in 2021

Lignite production in Poland increased by 13.1 percent year on year in 2021, while production of hard coal grew by 1.2 percent, the Central Statistical Office (GUS) reported this month.

In total, Poland produced 51.9 million tonnes of brown coal and 55.2 million tonnes of hard coal in 2021.

Around 70 percent of electricity in Poland comes from coal. In December last year, Poland's state assets ministry reported that, within ten months of 2021, the production of electricity in the country's coal-fired power plants grew by 31 percent year on year.

This month, trade unions from the Polish Mining Group (PGG), Europe's biggest hard coal producer, managed to reach an agreement with the company's management on a wage rise, which they demanded in return for their increased work-load which resulted from an increased demand for hard coal.

When it comes to coal production, in December alone, GUS reported that lignite production jumped by 48.3 percent year on year, while for hard coal it fell by 3.3 percent year on year.

Slovenia adopts strategy to complete coal phase-out by 2033

Slovenia's government adopted a national strategy to stop using coal for electricity production by 2033, it said.

The strategy envisages the closure of the Velenje coal mine, as well as a comprehensive social and economic restructuring of the Zasavje and Savinjska-Saleska regions, the government said in a statement recently.

Under the strategy, the 884 MW Sostanj coalfired power plant TES and the 123 MW Ljubljana coal-fired heat and power station which delivers 90% of the remotely generated heat in Slovenia's Zasavje and Savinjska-Saleska regions will have access to 248.4 million euro ($284.5 million) in financing from the Fair Transition Fund by 2027 to cushion the social impact of the coal phaseout, the government said.

Coal to make up 85% of total U.S. power capacity to be retired in 2022 – EIA

Coal-fired plants will account for about 85% of total U.S. power capacity scheduled for retirement this year with natural gas and renewables taking a greater share of the supply, the U.S. Energy Information Administration said this week.

U.S. power plant operators were scheduled to retire about 12.6 gigawatt (GW) of coal-fired generating capacity in 2022 out of the total 14.9 GW capacity set to be retired.

The largest coal power plant scheduled to go out of service in 2022 is the 1,305-megawatt (MW) William H. Zimmer plant in Ohio, the EIA said.

In 2022, 1.2 GW of U.S. natural gas-fired capacity is due for retirement, while at 0.8 GW, nuclear capacity retirements represent 5% of expected shutdowns this year, the EIA said.

The retiring natural gas capacity is made up of older steam and combustion turbine units. The largest U.S. natural gas plant due to close in 2022 is the Meramec power plant in Missouri, the agency said.

US Hampton Roads coal exports fall to nine-month low in December

terminals in Virginia fell 16% on the month to 2.38 million in December, a nine-month low, Virginia Maritime Association data released Jan. 24 showed.

December's coal exports were the lowest since 2.35 million st in March and 16% lower than 2.83 million st in November, when exports had hit a 20-month high.

FOB Hampton Roads 6,000 kcal/kg thermal coal fell to an average $126.77/mt in December, down from $128.23/mt in November, the highest price on record since S&P Global Platts began assessing it April 6, 2018. The December average was the second highest price on record.

The CIF ARA price also fell from the previous month to $143.13/mt, down for the second month in a row after hitting a 14-year high in October 2021.

US East Coast low-vol metallurgical coal averaged $317.14/mt in December, down from $385.46/mt in the previous month. Full-year exports from the terminals through December totaled 29.67 million st, up from 26.64 million st in 2020.

The Hampton Roads region saw 37 coal ships set sail in December, down from 29 in the previous month. Total departures in 2021 were 398 ships, up from 375 ships in 2020.

DTEK accepting two more vessels with 158,000 tonnes of American coal in ports

DTEK Energy is accepting two more Panamax class ships from the United States in Ukrainian ports.

According to the company’s press release, the seventh vessel with 75,500 tonnes of American coal on January 9 moored in the TIS port, and the eighth vessel with 82,500 tonnes of coal will moor in Pivdenny port on January 11.

Coal from the next Panamax ships will replenish the warehouses of DTEK Energy TPPs. “These days we are accepting the seventh and eighth Panamax ships, which deliver 158,000 tonnes of fuel. Also, in January, we expect the arrival of the ninth ship with imported coal. In total, this is 215,000 tonnes for the needs of Ukrainian thermal power plants,” CEO of DTEK Energy Ildar Saleev said.

As the company recalled, DTEK has contracted nine ship supplies with 618,000 tonnes of coal for the needs of Ukrainian thermal power plants. The first vessel contracted by the company for the needs of state-owned PJSC Centrenergo arrived in Ukraine on November 20, 2021.

In December, another five Panamax ships with 350,000 tonnes of coal arrived in Ukraine for the needs of DTEK Energy TPPs. Three more ship deliveries are in January 2022.

Brazil extends coal use to 2040 under new 'just transition' law

Brazil will continue to use and subsidize coal as an energy source until at least 2040, according to a so-called "just energy transition" law published, which policy experts said goes against the climate and consumers.

Broadly, "just transition" is a process aimed at ensuring the benefits of a green economy shift are shared widely, while supporting those who may lose out economically, whether nations, regions, industries, communities, workers or consumers.

But Brazil's new law - far from promoting the adoption of climate-friendly clean fuels - benefits coal producers in southern Santa Catarina state by prolonging the activities of coal-based power plants in the region for a further 18 years.

Under previous policies, Brazilian subsidies for thermal coal-powered plants were supposed to end by 2027, and the authorization for three large plants in Santa Catarina to operate was meant to expire in 2025.