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Asia's coal imports decline, but Ukraine crisis will keep prices up
Asia's imports of coal slumped in February as prices remained close to record highs for both thermal and coking grades, and the crisis in Ukraine means the cost of the fuel is unlikely to retreat any time soon. Seaborne imports of all grades of coal across Asia, the top-consuming region for the polluting fuel, fell to 59.27 million tonnes in February from 61.92 million in January, according to port and vessel-tracking data compiled by Refinitiv. This was the lowest monthly total in Refinitiv data dating back to January 2015, and was also some 13% below the 68.15 million tonnes the continent imported by ship in February 2021. A milder winter across north Asia, high prices and the lingering effects of Indonesia's shortlived export ban for the month of January are the most likely culprits behind the drop in February import volumes. China, the world's biggest coal importer, has recorded a weak start to 2022, with February imports of 11.65 million tonnes marginally higher than January's 11.27 million, but the combined total for the first two months of the year is the lowest Refinitiv has assessed. Imports in the first two months of 22.92 million tonnes are 46.2% below the 42.58 million recorded in the first two months of last year, according to Refinitiv.
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China: Some Coal Prices Started to Fall, Coke Market with Stable Expectations
On the supply side, deliveries were limited in some areas with strict prevention control measures, but production were not affected, while coking enterprises operated normally with smooth shipments. Inventories of coke enterprises run at low levels. On the demand side, the operating rates of steel mills were running at a high level with high utilization of blast furnaces, while coke stocks continued to fall with high enthusiasm for coke procurement. In terms of raw material, coking coal stocks in coal mines accumulated, and some prices of the coal bids dropped, leading to the increasing wait-and-see sentiment in the market. Prices of some types of coal started to decrease. Comprehensively, due to the strict prevention control measures, transport was blocked while the resumption of steel mills went well. The demand for coke was still satisfying, but prices of coking coal were expected to fall. Coking enterprises expect the prices to remain stable. It is expected that the coke market would be at stable operation in the short term.
With a new train diagram to be put into operation from April 8, China will launch additional cargo trains to boost coal transport amid the country's efforts to ensure energy supply. According to the diagram, new cargo trains will be added to transport coal from the coal-rich Shanxi Province to the eastern regions, said the China State Railway Group Co., Ltd. More heavy-haul freight trains will be put into operation to step up the country's capacity to transport coal from north to south, the company said. The adjustment will further enhance the country's thermal coal transport capacity and provide stronger support for the national economy, it said. In addition, a new batch of bullet trains will be added to optimize railway routes and provide more travel options for passengers in central and eastern parts of the country, according to the diagram.
. Indonesia coal miners may struggle to meet 2022 output target: Association
Indonesian miners may struggle to reach a 2022 output target of 663 million tonnes because of export restrictions imposed unexpectedly in January, Indonesia Coal Miners Association executive director Hendra Sinadia said. The world's top thermal coal exporter shocked global energy markets at the start of the year with a decision to halt foreign shipments to shore up domestic supply for power stations. Exports have since resumed but the government has put in place rules where miners' domestic sales are monitored monthly and only those fulfilling local quotas are then allowed to export. Meanwhile, coal demand and prices are being pushed higher as Russia's invasion of Ukraine sends oil prices soaring, leading buyers to seek alternative fuel supplies from Indonesia and Australia, Hendra said during an interview on local television network IDX Channel. "We heard there are some buyers, even embassies of European countries who try to facilitate (exports talks) with companies in Indonesia," he said, adding that miners may not be prepared to meet this additional demand. Indonesia's 2022 output target, up from last year's 614 million tonnes, was "too optimistic" to begin with, Hendra said.
Australia to provide Ukraine with 70,000 tonnes of coal
Australia will provide Ukraine with at least 70,000 tonnes of thermal coal to strengthen energy security. The Economy Ministry of Ukraine wrote this on Facebook, Ukrinform reports. The Australian government has held talks with the country's coal companies to accumulate certain volumes of coal for further transfer to Ukraine as part of humanitarian aid. It is noted that the Australian company Whitehaven Coal will organize a corresponding dispatch. Coal and its delivery costs will be covered by the Australian government. “Australia is internationally recognized as a leading and reliable supplier of energy resources. We thank our Australian partners for helping Ukraine in this difficult time when our state is resisting an illegal and brutal military invasion by Russia," Ukrainian Energy Minister German Galushchenko said.
Coal driving rise in Malaysian cement prices
Malaysia: Sharuddin Omar Hashim, the managing director of Cement Industries of Malaysia Berhad (CIMA), says that rising input materials, especially coal, are driving up the cost of cement.
He blamed the mounting price of coal on Indonesia’s export ban and the war in Ukraine, according to the Malaysian National News Agency. Sharuddin said that coal had previously cost up to US$70/t but it was now US$200/t, with the possibility of reaching US$400/t. Other raw material costs were also reported to have risen sharply due to logistic problems following the Covid-19 pandemic. Sharuddin added that his company is trying to optimise production and reduce production costs through the use of other alternative materials.
Minister: Cost of generating electricity in Malaysia increases by 45pc due to increase in coal prices
The increase in coal prices has caused the cost of generating electricity to increase by 45 per cent, said Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan. He said, however, the government had decided to give a rebate of two sen per kilowatt-hour for domestic consumers from February to June 2022. “The government covers a subsidy of RM715 million using funds from the Kumpulan Wang Industri Elektrik. We do not impose any surcharge even though it should be released to consumers,” he said when winding up the debate on the motion of thanks for the Royal Address for the Ministry of Energy and Natural Resources (KETSA) in Parliament. Takiyuddin said that between July and December 2021, a total of RM1.672 billion had been spent on fuel purchases for electricity generation, which should have been released to consumers for the period from February to June 2022.
Ukraine has enough coal to avoid more imports – Dtek
Ukraine’s coal stocks have risen to over 1m tonnes, up more than 40% on the month, thereby negating the need for further imports to keep the country’s lights on, Dtek said. “At this stage, Ukraine does not need any imported coal to keep power stations in operation,” Maxim Timchenko, CEO of the Ukrainian energy firm, said at a virtual press briefing.
Stocks at this time last year were at just 0.43m tonnes. Timchenko said daily consumption by Ukraine’s coal-fired plants amounted to around 0.03m tonnes, “so this means we have enough stock at the moment”. Russia halted all rail exports of coal to Ukraine in November. Since the invasion began a month ago the country’s import terminals have been unable to receive seaborne imports from countries such as Colombia and the US, which raised concerns of supply shortages. Dtek said last week that just Poland was supplying 0.06m tonnes of coal to ensure it had sufficient stocks to meet demand, and the CEO said around a further 0.1m tonnes could be requested, if needed.
Ukraine Crisis Could Send Coal Prices To $500
Coal prices are soaring, hitting $462 per tonne, up from $186 on the 23rd of February and likely to pass $500 this year, Rystad Energy research suggests. While most of Europe and the wider world have focused on how Russia’s war in Ukraine has impacted oil, gas, and, more recently, nickel prices, relatively little has been written about the coal price shock that is likely to hit the region and spread like a tsunami around the world. Russia is Europe’s largest supplier of thermal coal. According to Eurostat, last year, Russia supplied EU member states with 36 million tonnes of thermal coal, representing 70% of total thermal coal imports. While volumes have stayed about the same, a decade ago, Russian coal imports were just half that at 35%. While total power coal demand has been on a declining trend for the last 10 years, coal-fired power generators in Europe have become increasingly dependent on Russian coal and Russia’s market share has grown substantially over time.
Germany woos South Africa to replace Russian coal
Germany’s plan to halt all imports of Russian coal this year has deepened market efforts to secure alternative material in the shortest possible time, with South Africa – formerly one of Europe’s main suppliers – one of the most favourable candidates, market participants said. Economy and climate minister Robert Habeck announced over the weekend that Germany would aim to scrap Russian coal imports by autumn. The government is now in talks on how best to curb its dependency on Russian coal, according to an energy ministry spokesman, noting the supply possibilities “are diverse” without specifying a preference of origin. “South Africa will be the one profiting most, in my view,” said a coal trader with a large German utility. He pointed out that South Africa could increase its exports of higher-grade material – required by European utilities – if prices remained high for a protracted period. Already, after Russian troops first entered eastern Ukraine last month, German utilities began jetting their coal traders off to South Africa, where they hoped high prices and the prospect of long-term demand may lure cargoes away from the more usual – and reliable – Asia-Pacific customers. But even with prices five-fold higher than a year ago, South African miners would struggle to increase exports to Europe, at least to the extent required, market participants said.
. US coal production falls 5.5% on week: EIA
Weekly US coal production fell 5.5% on the week to 11.3 million st in the week ended March 12, according to Energy Information Administration data released March 17.
With shoulder season approaching, all major basins decreased production compared with the previous week, with Central Appalachia and Illinois Basin coal regions dropping by the most significant margins nationwide. On an annualized basis, total production was 593.7 million st, up 0.7% from 2021. IB output fell 8.1% week on week to 1.5 million st, down 13.5% on the year. IB trailed the nation in year-on-year production in part due to the idling of one of its largest mines, Foresight Energy’s Sugar Camp, because of an underground fire last August. Year-to-date IB production was 16 million st, down 0.1% from 2021. Illinois Basin was the only major coal-producing region to post a year-on-year production deficit in the latest week on a year-to-date basis. Annualized IB production rose 7.6% from 2021 to 81 million st.
Central Appalachia output fell 8.1% on the week to 1.3 million st, down 6.2% on the year. Yearto-date CAPP production was 13.3 million st, up 2.2% from the same period in 2021. On an annualized basis, CAPP production was 67.2 million st, up 4.7% from 2021..
. US coal production falls 5.5% on week: EIA
Weekly US coal production fell 5.5% on the week to 11.3 million st in the week ended March 12, according to Energy Information Administration data released March 17.
With shoulder season approaching, all major basins decreased production compared with the previous week, with Central Appalachia and Illinois Basin coal regions dropping by the most significant margins nationwide. On an annualized basis, total production was 593.7 million st, up 0.7% from 2021. IB output fell 8.1% week on week to 1.5 million st, down 13.5% on the year. IB trailed the nation in year-on-year production in part due to the idling of one of its largest mines, Foresight Energy’s Sugar Camp, because of an underground fire last August. Year-to-date IB production was 16 million st, down 0.1% from 2021. Illinois Basin was the only major coal-producing region to post a year-on-year production deficit in the latest week on a year-to-date basis. Annualized IB production rose 7.6% from 2021 to 81 million st.
Central Appalachia output fell 8.1% on the week to 1.3 million st, down 6.2% on the year. Yearto-date CAPP production was 13.3 million st, up 2.2% from the same period in 2021. On an annualized basis, CAPP production was 67.2 million st, up 4.7% from 2021..
Alberta government to extend pause on Rocky Mountain coal mine development.
Canada - The Alberta government is renewing and expanding its restrictions on coal mining in the province’s Rocky Mountains in response to two reports written after extensive public consultations on the issue.
Energy Minister Sonya Savage said she is maintaining a ministerial order blocking all coal exploration and development in the region’s most sensitive lands. She is also extending that order to cover a much wider swath of the province’s summits and foothills. Coal development will now be blocked on all the lands originally covered by the province’s 1976 coal policy until land-use plans, which require public consultation and legislative approval, are complete. Four coal projects that have already entered the regulatory process will be able to continue that work, if the proponents choose.
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