China’s major coal-producing province accelerates digital transformation

At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-theclock to support high-tech enterprises nationwide in such fields as AI, autonomous driving, and quantum communication. The development of the digital economy is advancing in Datong, known as China’s “coal capital.” The coalproducing heartland in north China’s Shanxi Province boasts one-eighth of the country’s coal reserves.

While phasing out outdated coal production capacity, the city has been looking for alternative industries for long-term growth. With years of effort, it has become the province’s pioneer in promoting the digital economy in an effort to achieve high-quality development. The city has built a total of 140,000 data center design racks and established a server capacity of up to 2 million units. Its computing output has become a new point of growth in a city that traditionally relied on fossil fuel resources.

In addition to Datong, other traditional coalproducing cities of Lyuliang and Yangquan in the province are also promoting digital economy in the fields of big data, smart mining and unmanned driving.At 500 meters underground, robots are patrolling to monitor mining in the Xinyuan coal mine of the Lu’an Chemical Group Co., Ltd. Assisted by 5G technology, the automated inspectors send real-time data to the mining company’s control center to check mining safety.

Coal Market Forecast 2023: Top Trends That Will Affect Coal in 2023

As the world moves towards green energy, what will happen to coal? Read on to learn what analysts see for the coal forecast in 2023. Coal pric- es rose in 2021, and 2022 was another positive year as demand increased on the back of the energy crisis. However, with renewable energy adoption continuing to grow as governments push for cleaner sources of power, many wonder what could be next for coal. Read on to learn more about coal’s performance in 2022, as well as what experts see coming.

Prices for thermal coal, widely used in power stations to generate electricity, started the year trading upwards as tight supply and Russia’s invasion of Ukraine impacted the sector. Similarly, metallurgical coal prices increased on the back of Russia’s invasion of Ukraine. Metallurgical coal, also known as coking coal, is used to produce coke, the primary source of carbon used in steelmaking.

Despite pledges to reach net-zero emissions, the ongoing war sent oil and gas prices up in 2022, which in turn had many countries increase their coal use despite their clean energy commitments. According to the International Energy Agency (IEA), coal's traditional trade flows were disrupted in 2022, with prices soaring and demand set to grow by 1.2%, reaching an all-time high and surpassing 8 billion metric tons (MT) for the first time.

Global seaborne coking coal trade volumes increased by nearly 10% in 2022, outlook bullish

Despite the slump in world crude steel production in 2022, global seaborne trade in coking coal remained strong with imports of met coal and PCI increasing by 8% y-o-y to around 320 million tonnes (mnt) from 295 mnt in 2021, as per provisional data maintained with CoalMint.

India was the leading coking coal importer at 69 mnt, accounting for 22% of total global imports. India's imports were almost stable y-o-y compared to 2021. For Indian importers of coking coal there was no major change in the demand scenario. Demand did not fluctuate much since the steel export duty fiasco but remained generally steady. No major producer cut production sharply. In fact, steel production increased by around 9 mnt y-o-y in the April-December period.

China was the second-largest importer at 63 mnt. Imports by China rose 14% y-o-y, although crude steel production fell by 1.4% in JanuaryNovember 2022, as per WSA data. Pandemic restrictions impeded the movement of domestic scrap for steelmaking, thereby impacting EAF steel production. Higher shipments by Russia and Mongolia also account for higher imports by China. Mongolian shipments doubled y-o-y in 2022 as COVID-related restrictions were eased enabling truck movement across the border, while Russian cargoes were available at much cheaper rates since sanctions against Russia came into force in August.

.Europe’s gas price plunge churns up global coal markets

Thanks to a recent plunge in European natural gas prices down 60% since December 1 on mild winter temperatures, filled storage tanks, and diminished industrial use European coal prices and demand have slumped so far in 2023. Thermal coal markets were a prominent beneficiary of Europe’s power sector turmoil in 2022, with prices surging more than 250% through midMarch as utilities and trading firms scrambled to replace lost supplies of Russian natural gas with other fuels.

Benchmark European thermal coal TRAPI2Mc1 prices remained close to historic highs throughout 2022 on sustained higher use across the continent, averaging roughly $285 per tonne for the year, compared with about $115 a tonne in 2021. Higher coal use also yielded more pollution, with the cumulative discharge of carbon dioxide (CO2) by Europe’s coal power sector topping 600 million tonnes through November, the highest tally for the period since 2019, and data from Ember shows.

That clashes with the more bullish posture of coal markets in top coal-consuming region Asia, which has been bracing for sharply higher coal use and purchases in 2023 as dominant coal consumer China reboots its economy following a COVID-hit 2022. The divergent tones of Europe’s and Asia’s coal markets are captured by the record-wide price spread between them.

Germany needs coal for longer than planned: VDKI

Germany's coal imports and demand rose in 2022 for the second year running, and the country will depend on coal for longer than planned by the government, the coal importers association VDKI has warned. Demand from Germany's hard coal-fired power stations jumped by 16pc last year to around 25mn t of steam coal or 21.5mn t of "coal equivalent" (according to VDKI estimates. VDKI had expected even higher consumption, but strong photovoltaic (PV) generation in the summer and wind generation in the autumn put paid to that.

The country's overall hard coal consumption posted a more modest rise of 4.8pc last year to 39.6mn tce or 46.2mn t, as steel sector demand dropped by 6pc on the year. VDKI lists domestic consumption in tce. Germany last year imported 43mn t of hard coal, 4.7pc up on 2021, VDKI estimates. Imports of steam coal used for power plants gained almost 12pc to an estimated 30mn t — almost matching 2019 imports of 30.1mn t. Coking coal and coke imports fell last year, by 7pc and 15pc on the year, respectively, to 11mn t and 2mn t.

At the same time, Germany's 2022 primary energy consumption was 4.7pc lower on the year, with nuclear energy and natural gas posting the highest losses, according to preliminary data from energy sector working group Ageb released last month. The overall share of hard coal in Germany's primary energy consumption last year rose to 9.8pc, from 8.9pc in 2021, according to Ageb.

Romania plans to expand coal

Mine Over 100 Hectares Of Forests

The Romanian government adopted the decision to cut down a 106-hectare forest without compensation so that the state-owned coal mine and plant operator Complexul Energetic Oltenia (CE Oltenia) could expand one of its lignite mines, Bankwatch reported. The government’s decision will allow CE Oltenia to increase lignite output at the Timișeni-Pinoasa mine to 8 million tons per year.

That’s almost half of the total 2021 lignite production by CE Oltenia, which operates most of the country’s coal mines and thermal power plants. Coal mine expansion contravenes National Recovery and Resilience Plan. The decision to expand lignite mining, adopted by the government last week, runs counter to the decarbonization process, which is a part of the National Recovery and Resilience Plan (NRRP) and national law, which envisions phasing out coal by 2032, Bankwatch said.

Late in 2022, the government made two more decisions that contradicted decarbonization processes, noted Bankwatch. The government approved a decision to postpone the closure of two 660 MW blocks, Rovinari 3 and Turceni 7, and extend their operation until October 2023. The government also postponed the closure of two 660 MW blocks, Rovinari 3 and Turceni 7.

US thermal coal exports may struggle amid self-sufficient Asia

US seaborne thermal coal exports are expected to remain slightly softer in 2023 as demand from Asia wanes and supply-side concerns take a back seat with the availability of additional Russian tonnages, market sources told S&P Global Commodity Insights.

Demand for US coal is surely depleting from South Asia and Southeast Asia, especially after how Russian coal has made a sort of backdoor entry in terms of supply, a large buyer of US coal in Asia said. Coal from Russia is also coming at very competitive prices to China and India, eroding the US coal market, and the trend is likely to continue going into 2023, he added.

With Europe sanctioning Russian coal in 2022 due to its invasion of Ukraine, additional cargoes available from Russia were largely purchased by China and India as they were offered at hefty discounts. While the trend continues, the discounts have come down to some extent. In 2022, Russian coal displaced about 6.6 million mt of US thermal coal at cheaper-thanprevailing prices in markets like China and India, according to S&P Global data.

Lack Of Trains Cost Wyoming $100 Million in Coal Revenue In 2022

Wyoming coal mines saw an uptick in production last year, but about 50 million tonnes of production didn’t happen because of a lack of rail service to get the coal from the mines in Wyoming to power plants across the country. During a presentation for the Senate Minerals, Business and Economic Development Committee this week, Wyoming Mining Association Executive Director Travis Deti said that when mines can’t ship coal, it’s just lost business.

Deti estimates that the state of Wyoming lost about $100 million in revenues as a result of unrealized severance taxes from that lost production in 2022. In December, during the Arctic blast that sent temperatures rapidly into negative numbers in a matter of hours, Wyoming mines had consecutive days in which no rail cars were available.

Deti told Cowboy State Daily that one of Wyoming’s coal companies told him recently that when it comes to getting rail service, it’s “hit or miss.” When coal-fired power plants can’t get coal, they switch to natural gas, Deti said. During periods of cold weather, natural gas prices tend to go up, and so when plants are using more gas, it costs more for consumers.