CCAI Monthly Newsletter March-23

JINDAL STEEL & POWER LIMITED

PARALLEL FLANGE BEAMS & COLUMNS | PLATES | RAILS ANGLES | CHANNELS | COILS | TMT REBARS

CUT & BEND BARS | WELDED WIRE MESH | WIRE RODS

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FABRICATED SECTIONS TMT REBARS

CUT & BEND HOT ROLLED COILS

PARALLEL FLANGE BEAMS & COLUMNS ANGLES PLATES

JSPL DEVELOPS HEAVY CRANE RAILS OF UPTO 150 KG PER METER

From the Editor’s Desk

The overall global coal scenario has experienced a shift in dynamics leading to alteration of the coal market and prices. The outlook of the coal import market appears to be positive with a considerable growth expected from 2023 onwards. Prospects of coal prices are likely to be mixed in 2023, with seaborne coal value remaining relatively low. As per IEA, global coal demand will be primarily driven by China and India’s economic growth. In 2022, global coal consumption levels rose to a substantial high, led by India and China, while increased exports from countries such as South Africa and Colombia partially offset the reduction of Russian exports to Europe. Europe also saw an interesting turn of events in the coal market with the demand for South African coal declining, followed by a surge in demand last year in the wake of an EU-wide ban on Russian coal imports. However, Germany saw a substantial increase in coal imports in 2023 as compared to last year. Imports also rose in Poland by more than 50 % Y-o-Y in 2022, although, the second and third quarters of 2023 look a little slow paced for the country in terms of coal imports.

Russia meanwhile hiked coal exports to Asia by 85% in the first two months of the year. The Australian and South African benchmark prices dropped from their peaks in April and September 2022, respectively. The gap between the two benchmarks has almost disappeared, due to supply disruptions in Australia.

Asia witnessed thermal coal imports in China in the opening quarter of 2023 soaring to new highs as utilities and businesses restocked in anticipation of greater energy use. China’s total thermal coal imports through March shot up to around 81% from the same period a year ago. Low prices and growing energy demand boosted imports of seaborne thermal coal among most of Asia’s major buyers using the fuel to generate power. The world’s two major coal producers, China and India, led the way with their imports peaking. Meanwhile, Indonesia posted exponential growth in coal exports in 2023 since January 2018, according to data.

Experts have anticipated that coal consumption will likely hit a record high and remain stable until 2025 when the transition to clean fuel alternatives gathers momentum.

While future scenarios for global coal imports cannot be accurately predicted, it is clear that the world is moving towards more sustainable and renewable energy sources, which may largely impact the future of the coal trade.

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06 Consumers' Page

10 Power

18 Domestic

24 Global

33 Monthly Fuel Summary

37 Overall Domestic Coal Scenario

CONSUMERS’ PAGE

1. Submission requesting amendment of overloading clause (s) in the FSA:

As per The relevant clause provisioning the overloading charges in the FSA, all penal charges related to overloading of rakes have to be paid by the consumers for at least three months before the seller/coal company requires to take any remedial measures (after complaints of overloading for 3 consecutive months).

Further on a special instance, The Bilaspur Division of SECR imposed 6 (Six) times penal detention charges i.eRs. 53,100/- per hour with effect from 25.12.2022 for load adjustment of rakes instead of standard demurrage charges (Rs. 8,850/- per hour).

The loading of rakes is the responsibility of the coal companies and the consumers do not have

any role in the rake-loading process. Therefore, the penalty towards overloading should ideally be borne by the seller and excess freight charges may be borne by the purchasers.

Request has been made to MoC and CIL so that practice of levying penal charges for overloading from the coal consumers may be taken up with the railways for reconsideration

2. Submission requesting amendment of underloading clause (s) in the FSA:

In case of despatch of idle freights for underloading of rakes below stenciled carrying capacity, charges are borne by the coal company. However, the full amount is not refunded to the consumers in most of the coal bills in case of under-loading.

Refund given against underloading is often much lower than the actual underloading charges as the coal companies pay underloading charges limited to the difference of CC/stencil capacity and actual weight of coal loaded in the wagon. But the railways charge freight as per Permissible Carrying Capacity (PCC) /chargeable weight. In most cases, PCC / chargeable weight is more than the CC /stencil capacity. Also, there is no uniformity across subsidiaries with regard to considering carrying capacity based on actual tare weight in the calculation of underloading.

Request has been made to MoC and CIL so that underloading charges in totality may be borne by the seller and the existing underloading clause may be considered for modification accordingly. CIL is also requested to intervene for timely release of underloading-refund by the coal companies.

3. Submission regarding high deviation between third-party and referee results of coal supplied to Power Sector by ECL:

Power Sector consumers have been suffering due to significantly high variance between the referee Analysis results and third-party analysis results of the coal samples taken from ECL’s Salanpur area (SLS1) followed by Mugma, SonepurBazari, Bankola, Pandaveswar, Kajora etc. during FY 2020-21. The referee analysis results of most of the samples challenged by the coal company show the coal grade to be 1-4 grades higher than the third-party analysis results of the same samples.

In many instances, the referee results are abysmally higher than the analysis results by the third-party sampling agency. However, as per BIS standard, precision for repeat ability of the analysis of the same samples in two different labs should not be more than 65 kcal/ kg. Therefore, such high instances of variation between the referee and third-party results is creating uncertainty over determining the actual grade of

coal delivered to the Utilities.

Submissions have been made to the Hon’ble Ministry of Coal, CCO and third party agency CSIR-CIMFR to intervene and take up the matter with ECL in order to resolve the issue of such high-grade variation between the referee analysis results and the reported results of the thirdparty sampling agency.

4. Submission by Power Sector consumers to issue proforma invoice on daily coal despatch/lifting via Road mode under Usance LC mode of payment:

As per the point A-5 of Methodology extending Usance LC for the coal supplies under the FSAs issued by SECL / CIL it is mentioned that, ‘the pro-forma invoice shall be raised on rake to rake basis in case of rail despatches and on daily basis in case of despatch by other modes. However, SECL has started taking bulk payment from its customers under the LC mechanism before issuing (in case of other than Railways) sale orders to initiate the actual supply of coal from February ’23 onwards.

Request has been made to SECL to issue proforma invoice/payment invoice on daily despatch/lifting via Road mode as in the Usance LC SOP for extending LC mode of payment facility to the Power Sector consumers.

5. Submission by Power Sector for grade determination of unsampled coal quantity as per FSA and coal value reconciliation:

According to the terms of the tripartite agreement, third-party sampling needs to be done for any quantity of coal supplied to the Power Sector. However, a significant amount of coal supplied from SECL to the Power Sector has been delivered without conducting third-party sampling during FY 2022-23. Even joint sampling was not conducted for the delivered quantity in

case the third-party sampling is not done as per the FSA provision.

As a result, many Utilities received a considerable amount of unsampled coal for which reconciliation against grade slippage could not be done. As per the FSA, if coal samples are not collected from a source/despatch point the weighted average of the most recent results available in any preceding month against respective source and coal grade shall be adopted for such dispatches.

Request has been made to SECL and CIL so that grade determination of the unsampled quantity supplied by SECL may be finalised as per FSA provision, based on which Coal value reconciliation may be carried out for the delivered quantity and credit/debit notes may be issued accordingly.

6. Submission by Power Sector consumers requesting refund of differential GST amounts along with reimbursement for idle freight:

A number of CIL Subsidiaries – MCL, SECL & WCL are not providing refund of differential GST amounts while providing reimbursement for idle freights while some of the other subsidiaries such as ECL and CCL are providing underloading-refund along with GST components. Therefore, the consumers procuring coal from the Subsidiaries which are not refunding the GST amounts are being affected financially despite no fault from their side.

Request has been made to CIL for providing refund of differential GST amounts from all the subsidiary coal companies uniformly while providing reimbursement on account of underloading of rakes.

7. Submission to expedite NRS Linkage Auction under Tranche – VI for Captive Power Plants (CPPs) by Coal India Ltd:

Even as supply to the NRS consumers including Captive Power Plants (CPPs) has increased in the past few months, coal despatch is still insufficient compared to their requirement. This has led the consumers from this Sub-sector to purchase coal from the open market by paying a hefty premium and import coal from different sources, putting huge financial burden especially on the Captive Power Plants.

Request has been made to MoC and CIL to conduct the Tranche- VI NRS Linkage Auction for CPP Sub-sector at the earliest possible.

8. Request for increasing supply of rakes to the Non-regulated Sector (NRS) including Captive Power Plants (CPPs):

Approximately 15-16 rakes are being despatched by CIL to the Non-power Sector despite high coal demand, while the average daily despatch was more than 25 rakes during the same period last year. Among the CIL Subsidiaries, MCL and ECL are contributing largely to the daily coal rake despatch to the Industries till March ’23 while coal received by NRS consumers from subsidiaries like NCL, CCL, WCL, and SECL via rail mode still remains inadequate and requires significant improvement.

Also as per these Industries, change in mode of supply from Rail to Road is also not helping as supplied quantity has often been below the trigger level (65% of ACQ). Meanwhile, a large amount of their fund deposited as coal value advance is being stuck with the coal company.

Owing to an insufficient supply of coal rakes, several industries including continuous process plants are compelled to convert from rail mode to road offtake to sustain their operations.Request has been made to MoC and CIL to increase in the supply of rakes to NRS consumers including their captive power units from all the CIL subsidiaries at the earliest.

POWER THERMAL

India's electricity demand growing at 10.5% is unprecedented: RK Singh

Union Minister for Power and Renewable Energy RK Singh has stated that the government is "well prepared" to handle the peak power demand this summer. He pointed out that the electricity demand in the country is growing at an unprecedented rate of 10.5%, and the government is confident that it can handle it.

To avoid a repeat of last year's power crisis, the Power Ministry has already issued two signifi-

cant orders. The first order mandates all coalbased power generators to blend 6% of imported coal, while the second invokes section 11 of the Electricity Act, 2003, so that all thermal plants using imported coal generate at their full capacity.

Last year, these orders were issued in May, when the power crisis had already taken hold. In April and May 2022, many states in the country faced hours of outages due to heatwaves, rapid economic recovery, and a shortage of coal to generate power. This happened despite record coal production by Coal India in 2021-22.

To mitigate crisis this year, the government is eyeing multi-pronged strategies which include a total of 9,000 megawatt (MW) electricity from gas-based power plants and another 2,920 MW from brand new thermal power plants to meet the surge in power demand this summer.

Power prices expected to remain firm next fiscal amid higher demand: Crisil

Power prices are expected to remain firm next fiscal on the back of elevated demand growth of 5.5-6 per cent, and the demand is set to close this fiscal up 9.5-10 per cent over 8.2 per cent last fiscal, a report said.

The fears of a heat wave has seen the shortterm power prices soaring by a full 151 per cent. This was on the back of a 42 per cent on-year spike in prices in February, Crisil said in a report. The demand growth would mark a decadal high rate of growth and almost double the 20-year average of 5.2 per cent.

On generation, non-hydro renewable sources are estimated to account for 11 per cent this fiscal and their share is expected to rise a notch next fiscal, with solar and wind accounting for 13 per cent. Demand growth weighed in at 7.7 per cent in February and averaged 10 per cent for the 11 months of the current fiscal despite a high base of fiscal 2022 due to extreme weather events and robust industrial and manufacturing activity.

New domestic coal allocation policy to come into force on April 1, aims for even distribution of domestic coal

Domestic coal will be allocated in the ratio of the fortnightly average power production by generating stations, which will exclude the coal required by all the pithead stations of respective

gencos, since they don’t use the railway network and receive coal through the MGR method or conveyor belts.

With the Central Electricity Authority (CEA) estimating a peak power demand of 229 GW in India in April 2023, the Union Power Ministry’s new domestic coal allocation policy is slated to come into force on April 1 with an aim to distribute domestically available coal in an even manner.

In a review meeting held on March 7 by Minister for Power, and New and Renewable Energy RK Singh with officials from the ministries of power, railways and coal; it was noted that the domestically available coal from April to June 2023 won’t be more than 201 million tonnes (MT) due to constraints in railway logistics. However, the projected need of coal for this period will be 222 MT, due to which the need for an even distribution of domestic coal was observed. All plants off taking coal through roads as per their requirement will also be excluded. From April to June 2023, coal to be made available from captive mines will also be excluded for allocation of rail rakes from Coal India Limited and SCCL.

Govt to ration coal supply to power plants in April-June 2023 on railway rake shortfall

Beginning next month, Power Ministry will ration domestic coal supply to power plants in the April-June quarter due to a shortage of 21 million tonnes (mt) on account of limited availability of railway rakes.

As per calculations, against the requirement of 222 mt of domestic coal in Q1 ‘FY 23 the likely availability from all will be around 201 mt only due to constraints in Railway logistics. It was decided that available domestic coal will be distributed amongst the Gencos (Central, State & IPPs) in a “fair and transparent manner”.

Earlier this month, Power Ministry said that Rail-

ways agreed to provide 418 rakes a day and will enhance it in due course. Coal supply through rakes for the power sector in April-February FY23 stood at an average 408 rakes per day against 344 rakes a year-ago. In February, 426.3 rakes per day were loaded against 399 rakes last year.

The cumulative coal stocks at all power plants in the country as on March 22 is 34.37 million tonnes (MT), against a daily requirement of 2.78 MT. A total of 40 domestic coal based (DCB) power plants and seven imported coal based (ICB) plants have critical stocks. Power Ministry has projected a peak demand of 212 GW in March 2023. During FY24, peak demand is expected at 229 GW in the summer months.

Power ministry seeks comments on draft carbon credit trading scheme

The power ministry has issued a draft 'Carbon Credit Trading Scheme' with an aim to set up a framework for Indian carbon market and sought feedback from stakeholders.

The parliament has passed the Energy Conservation (Amendment) Bill, 2022. One of the provisions of this amendment included empowering the central government to specify carbon trading scheme. Now the ministry of power is in the process to finalise the Carbon Credit Trading Scheme (CCTS). The CCTS provides that an 'Accredited Carbon Verifier' means an agency accredited by the BEE to carry out validation or verification activities

in respect of the

CCTS.

The governance of the Indian Carbon Market (ICM) and direct oversight of its administrative and regulatory functioning shall vest in the governing board, to be called as ICMGB. The ICMGB will be power and environment secretaries would be the ex-officio co-chairmen of ICMGB.

The ICMGB shall meet at least once in a quarter of every year, or as may be required.

Expecting govt to invite bids for

Rs 1.50 lakh cr transmission projects in 18 months

The industry is expecting the government to invite bids for power transmission infrastructure projects worth Rs 1.50 lakh crore in the next 18 months. In December, the government launched a plan with investment opportunities of about Rs 2.44 lakh crore for building a transmission system for evacuating 500 gigawatts (GW) of non-fossil-fuel based energy by 2030.

“We expect that nearly 60-65 percent of these projects totallingRs 1,50,000 crore will come up for bidding in next 18 months since completion of all processes and the construction of projects will take another 4-5 years,” Sterlite Power Transmission has said.

The industry expects the government to invite bids under tariff-based competitive bidding (TBCB) for power transmission infrastructure projects as it accelerates the creation of new power lines and green energy corridors to integrate a rising share of renewable power. The EBIDTA during this period rose by 8 percent on y-o-y basis to nearly Rs 950 crore while the cash position has improved by 4.8 times to Rs 1,047 crore on y-o-y basis for the corresponding period.

PFC Consulting transfers three power transmission projects to Power Grid Corp

State-owned Power Finance Corporation arm PFC Consulting said it has transferred three special purpose vehicles, which were set up to implement different transmission projects, to Power Grid Corporation namely 'BhadlaSikar Transmission Ltd', 'Dharamjaigarh Transmission Ltd' & 'Raipur Pool Dhamtari Transmission Ltd on March 28, 2023.

The bidder was selected through the tariffbased competitive bidding process. One of the SPVs -- BhadlaSikar Transmission Ltd -- was

incorporated for establishment of transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II Part-E.

The other two SPVs -- Dharamjaigarh Transmission Ltd and Raipur Pool Dhamtari Transmission Ltd -- were incorporated for establishment of the Western Region Expansion Schemes.

Tata Power proposes new 400 KV transmission corridor for Mumbai

Tata Power, one of India's largest integrated power companies has proposed setting up of a high voltage 400 KV line corridor for Mumbai, to the state government and the state regulatory authority.

This new transmission corridor of 400 KV will help meet the city’s growing electricity demand and enhance electricity distribution to as high as 15,000MW in future. If approved, this project could take four-five years and may cost around Rs 1,000 crore. The transmission line will be in the form of a ring with two hemispheres of 30 km each. If one hemisphere fails, the other will act as a backup.

Mumbai's demand of around 3,500 MW is met by 110 KV and 220 KV lines.With 400 KV lines, Tata Power can source double that capacity on single wire from outside Mumbai, it claims.

Tata Power has around 70 per cent share in power transmission of Mumbai. It also assured that this summer Mumbai will not witness any power shortage and that its load growth won't be as high as national load growth. The company said it has invested Rs 2,300 crore in improving transmission infrastructure over the last five years. This included replacing up to 90 per cent of the aged systems. The company plans to invest another Rs 700 crore over the next fiscal to better transmission.

RENEWABLES

India needs $540 billion investment by 2029 to meet renewable targets

India needs USD 540 billion of investment between 2020 and 2029 to meet its ambitious targets for electricity generation from renewable sources, S&P Global Ratings said as it saw private-sector-led energy transition entering a new phase.

India is targeting to cut its emissions to net zero by 2070. In the transition to that, it is targeting 500 gigawatts (GW) of non-fossil electricity capacity, half of the energy from renewables, a reduction of emissions by one billion tonne and an emissions intensity of the GDP by 45 per cent by 2030.

“Private sector will lead generation capex while public sector utilities will likely lead grid investments,” it said. “Domestic long-term bank funding is available against projects and cash flows.” There is, however, limited appetite for unsecured holding company funding.

India is the world’s fourth biggest emitter of carbon dioxide after China, the US and the EU. But its emissions per capita are much lower than other major world economies. India emitted 1.9 tonnes of CO2 per head of population in 2019, compared to 15.5 tonne for the US and 12.5 tonne for Russia that year.

India’s renewable energy capacity reaches 168.96 GW till February 2023, says Minister R K Singh

India’s total installed renewable energy capacity touched 168.96 GW mark by February 2023-

end, Parliament was informed. Out of the total 168.96 GW, 64.38 GW is solar power capacity, 51.79 GW hydro, 42.02 GW wind and 10.77 GW bio power, R K Singh, Union Minister for Power, New and Renewable Energy, said in RajyaSabha. Another 82.62 GW of green energy capacity is under implementation and 40.89 GW of capacity is under various stages of tendering, he said in a written reply to the upper House.

A total of 3,16,754.86 MU of electricity has been generated from renewable energy sources during the current year 2022-23 (up to January 2023), Singh said.

According to the minister, India’s total power generation capacity was at 412.21 GW as on February 28, 2023. The government’s aim is to achieve 500 GW of installed electricity capacity from non-fossil sources by 2030

Centre gives Rs 800 crore to oil companies for setting up over 7000 charging stations under FAME II

India's public sector undertaking oil companies will soon be setting up 7,432 electric vehicle (EV) charging stations with the support of aRs 800 crore subsidy transfer by the Ministry of Heavy Industries. According to official data, these new stations will supplement the existing 6,586 public EV charging stations in the country.

According to officials in the know, the subsidy will be offered for setting up of Combined Charging System (CCS) - II EV fast charger and not for CHArge de MOve (CHAdeMO). Developers are free to set up CHAdeMO fast chargers too but the subsidy will not be given for it.

The EV stations will deploy fast as well as slow chargers. To reduce the cost of setting up a charging stations supported by the scheme, the proposed number of guns has been halved for both fast and slow chargers eligible for being subsidised under the program. This subsi-

dy grant from the government will help OMCs achieve their mission of setting up 22,000 EV charging stations across the country by 2024

Sunnier days help solar projects improve their performance this fiscal: Crisil

Longer sunnier days have ensured that the performance of solar power farms improved to 75 per cent in the current fiscal from 59 per cent in the year-ago period, according to a report. Rating agency Crisil has prepared the report based on the performance of 115 solar projects aggregating to 4.6 GW of power generation and those having an operational record of at least one full year.

As per the report, 75 per cent of these projects reached P90 level of generation in the current financial year which indicates generation that is likely to happen with 90 per cent confidence during the project's tenure annually. For example, a P90 value of 10,000 kWh for the annual output implies that it will generate over 10,000 kWh power for 90 per cent of the time.

The performance on the P90 metric is crucial as it is used widely to estimate the cash flow cushion available for debt servicing. Power generation that is 1 percentage point lower than P90 level reduces debt servicing cushion by 15 per cent and lowers return on equity by 1.5-2 percentage points.

According to the report, improvement in irradiation is weather-induced and remains crucial. A longer period of dwindling irradiation can reduce confidence in cash flows, and thus curtail interest from debt and equity investors alike

Parliamentary panel asks govt to adhere to strict timelines for rooftop solar projects

A Parliamentary panel has expressed concern

over the fact that against the overall target of 40 GW, only 7.40 GW of rooftop solar projects have been installed in the country, and has asked the government to adhere to strict timelines while approving applications for such projects.

The Parliamentary Standing Committee on Energy, in its report on demands for grants for 2023-24 for the Ministry of New and Renewable Energy, which was tabled in Parliament recommended that a strict timeline should be imposed for approval or rejection of applications and installation of net-meter as well as inspection of the system by distribution companies.

Also the distribution companies should mandatorily provide reasons behind rejection of applications on the national portal, the panel said.

It also suggested that distribution companies may be incentivised so that their apprehensions regarding losing their high-paying consumers because of installation of solar roof-tops are addressed and they positively participate in the programme

NHPC gets Cabinet approval for Rs 1600-crore investment in India’s largest hydro project

NHPC Ltd said the Cabinet Committee on Economic Affairs has approved an investment of Rs 1,600 crores for “pre-investment activities” for its 2,880 MW Dibang multipurpose project in Arunachal Pradesh. Touted to be India's largest hydro project, and equipped with storage, its cost is estimated to be Rs. 31,876.39 crores.

The completion period for the project is nine years from the receipt of government approval, the government-owned company said in a filing to the stock exchanges.

The project, located in the Lower Dibang Valley district, will generate 11,223 million units of energy per year. The dam will be 278 metres high concrete gravity dam and will be the highest in India. Once the project is completed, the state

will get 12% free power from the plant which would come to around 1348 million units per year. The country is planning another big hydro power project of 11,000 MW capacity on the strategically important Siang River in the state. The government plans to achieve 500 GW of installed electricity capacity from non-fossil fuel sources by 2030. Hydro power plants will play an important role in achieving the targe.

SJVN signs EPC contract agreement for 382 MW Sunni Dam Hydro Project

Clean energy PSU SJVN Limited has said that it has signed contract agreement for engineering, procurement & construction of civil & hydromechanical works of 382 MW Sunni Dam Hydro Electric Project. The contract agreement for Rs 1098 crores has been signed with Rithwik Projects Private Limited, Hyderabad.

382 MW Sunni Dam Project is a run-of-the-river project situated in District Shimla and Mandi of Himachal Pradesh on river Satluj. Project will generate 1382 million units annually at the levelized tariff of Rs. 3.90 per unit and will contribute 1.1 million tons annually towards carbon emission reduction.

On commissioning, 13 percent of the electricity generated will be provided free of cost to Government of Himachal Pradesh including 1 percent for Local Area Development Fund. For the project life cycle of 40 years, this free power translates into benefits of Rs 2,803 crores to Himachal Pradesh.

For the first time, India will have windmills in sea soon; massive 13MW mills planned

India will soon get to see windmills generating power from the sea as the Centre has floated tenders to set up offshore windmills along the

coasts of Tamil Nadu and Gujarat. The Ministry of New and Renewable Energy has floated tenders for offshore wind power at Dhanushkodi in Tamil Nadu and in three coastal zones in Gujarat. The three zones are Saurashtra, South Gujarat and Gulf of Khambhat coastlines.

The ministry has called for bids for 4000 MW (mega-watt). Unlike onshore wind power mills where the capacity is less than 1MW, offshore wind power mills will have a minimum capacity of 13MW.

The developer shall set up the offshore wind projects, including the offshore pooling station at the voltage level of 220kV (kilovolt). Metering for the purpose of energy accounting shall be done at respective onshore pooling stations, said the ministry.

The minimum capacity for acceptance of first part commissioning shall be 100 MW or 50% of the allocated project capacity, whichever is lower. Projects with capacity more than 500 MW can be commissioned in parts of at least 200 MW each, with the last part being the balance capacity.

Biomass market in India expected to reach rs 32,000 cr by fy31: report

Biomass market in India is expected to reach Rs 32,000 crore by FY2030-31 piggybacking on government schemes as well as investments from global green energy companies, according to a report.

The Indian biomass market is attracting investments from global green energy companies. There is a growing demand for the supply of clean and reliable power to businesses in India and biomass as a source of energy is expected to play a crucial role in meeting the power demand, the report explained.

The current availability of biomass in India is

estimated at about 750 MMT per annum and surplus biomass availability at about 230 MMT per annum. The installed capacity for biomass production in India has grown at a CAGR of 4 per cent reaching 10 GW in FY22.

Government initiatives such as biomass power & cogeneration programme along with the revised policy for biomass utilisation have promoted technologies for the optimum use of the country’s biomass resources.

Govt committed to biomass cofiring policy as it curbs pollution, generates income: MoS Power

The government is committed to biomass cofiring policy as the use of biomass pellets aimed at reducing pollution and better earnings for farmers and pellet manufacturers, Minister of State for Power Krishan Pal Gurjar said.

The minister said that the government was making serious efforts to promote the biomass pellet manufacturing sector. Power Secretary Alok Kumar lauded the great work done by the National Mission on Use of Biomass in Thermal Power Plants (SAMARTH).

He urged the state regulatory bodies, state generation companies and IPPs (independent power producers) to promote the use of Biomass Pellets, saying that despite multiple advantages, there was an inertia on part of these bodies to push for greater use of biomass pellets.

The conversion of biomass agro residue into pellets and co-firing them in thermal power plants is expected to not only save the environment from the harmful effects of stubble burning but also contribute towards the reduction of the country’s dependence on imported coal in electricity generation and increase the earning potential of farmers.

DOMESTIC COAL

India to slash coal imports amid rising local output

India plans to substantially reduce its imports of thermal coal, a dominant source of energy in the country, in three years as local production gathers momentum, Coal Minister Pralhad Joshi says. Imports, which account for about a fifth of India’s coal usage, prove a drain on foreign exchange reserves and expose users to price volatilities.

The coal ministry is closely working with the railways – a key part of the coal supply chain – to ensure there are no shortages this summer and

during the monsoon season when rains flood mines and hurt output. India expects to produce 880 million tonnes of coal during the current fiscal year ending this month, a 13% increase from a year earlier, Joshi said.

India’s coal output is expected to rise at a compounded annual rate of almost 9% during the five years to March 2026, against a growth rate of 2.3% in the prior five years, government data show. The nation has been auctioning mines at a rapid pace to shed its over-dependence on state miners Coal India Ltd and Singareni Collieries Co Ltd.

It has removed entry barriers for companies

to bid for the mines, eased environment regulations, simplified regulatory approvals and is handing out incentives for early start of mining to lure investors.

Govt launches 7th round of coal mine auctions; offers 106 mines for commercial sale

India has launched the seventh round of auctions for commercial mining of coal blocks, putting 106 mines under the hammer. Of the total mines offered under the seventh round, 61 blocks are partially explored and 45 mines are fully explored. As many as 95 non-coking coal mines, 10 lignite mines and one coking coal mine are being offered in the latest round of auction.

Coal and Mines Minister Pralhad Joshi said the government will provide incentives to players who will start early production from the mines while inviting the players to participate in the latest round. He also noted that coal will be in use for the next 40-50 years. Meanwhile, the Ministry of Coal signed agreements for 28 coal mines auctioned under the sixth round of auction. The cumulative PRC (peak rated capacity) of the 28 coal mines auctioned under the previous round is 74 million tonnes per annum (MTPA) and these mines are expected to generate annual revenue of Rs 14,497 crore calculated at PRC of these coal mines. Upon operationalisation, these mines are expected to generate employment for 1 lakh people

India To Start Coal Export By 2025-26: Coal Minister Pralhad

Joshi

Asserting that India has adequate coal reserves, Union Coal Minister Pralhad Joshi said the country will start exporting the dry fuel by 202526. From a net importer of coal, India is moving towards becoming a net exporter of non-coking coal.

The minister also assured of an uninterrupted supply of coal in the approaching summer season -- when the peak demand is expected to be

229 GW during April. Domestic demand for coal is estimated to reach 1,087 million tonnes in the ongoing financial year. The industry meets some parts of its requirements through imports. According to the Coal Ministry, India's cumulative total estimated coal reserve as of April 1, 2022, was 3.61 lakh million tonnes.

The minister further said: "Record coal production has happened at nearly 900 MT in FY23, and we have coal stock of 116-117 MT at present. I assure the country of uninterrupted coal supply in summers or in rainy seasons." Both private and public companies have been directed to continue with their coal production during April and May

Coal India aims to supply utilities 156mn t in Apr-Jun

CIL said it is optimistic of supplying 156mn t of coal to the country's power sector during the April-June quarter amid concerns over a spike in coal demand. Even after selling the planned volume to power utilities in April-June, CIL said it expects to have a "healthy" 50mn t of coal inventories at its pitheads by the end of June.

CIL supplied a record 153.2mn t of coal to domestic utilities in April-June 2022, an increase of nearly 20pc compared with the year-earlier period. CIL is targeting 610mn t of coal supplies to utilities during the 2023-24 fiscal year ending 31 March 2024, when total demand from the sector is estimated at 821mn t. CIL supplied 554mn t of coal to utilities from 1 April 2022 to 13 March 2023 and is aiming to increase this to over 585mn t by 31 March, an increase of about 8pc on the fiscal year.

CIL, which meets more than 80pc of India's coal needs, said it will have 68mn t of coal at its pitheads by the end of this month, while utilities are estimated to have another 32mn t of domestic coal stocks. Another 12mn t of coal are at private washeries, ports and captive mines, while railway rakes hold around 3mn t of coal at a given point of time, it said. A total of 115mn t of coal will be at power plants by the end of March, compared with last year's corresponding availability of 92.7mn t, CIL said.

Coal India’s supplies to non-regulated sectors seen up 16.6% during Jan-Mar

Coal production by captive and commercial Coal India Limited will likely see its despatches to non-regulated sectors increase 16.6% sequentially during January-March. Coal despatches to customers in non-regulated sectors, including cement, steel and aluminium industries, have been averaging 3.67 lakh tonne per day so far in Q4 FY23.

CIL will likely close the current quarter with 33 million tonne (MT) supply to the sector, as per a company statement. It would lead to 4.7 million tonne more coal, or a jump of 16.6%, from the 28.3 MT supplied in the third quarter of fiscal 2022-23.

Supplies to the non-regulated sector during January-March, expected at 33 MT, would be 3.1 MT more from the comparable quarter of FY22, representing a growth of 10.4%. CIL supplied 29.9 MT to non-regulated sector (NRS) in the final quarter of FY22. Improved supplies to NRS were due to inventory build-up CIL’s pitheads. In March so far, coal stock increase at CIL has been to the tune of 6 kakhtonne per day despite higher supplies to power utilities.

GST reimbursement, assured supply likely for coal gasifiers

Companies that respond to the government’s plan to gasify coal may be reimbursed the goods and services tax that they pay on buying the fossil fuel, said two people aware of the development amid a cool response by investors. In 2020, Centre announced an ambitious plan to gasify 100 million tonnes of coal by 2030, but it is yet to gain momentum because companies do not see it as economically viable.

Another factor behind the development is that three proposed joint ventures of Coal India that were to produce gas from coal have not progressed as anticipated. Coal India had signed three separate MoUs in October with state-run Bharat Heavy Electricals Ltd (BHEL), Indian Oil Corp. Ltd (IOCL) and GAIL (India) Ltd.

The high ash content found in Indian coal is also a technical barrier to large-scale coal gasification. Coal gasification, the process which turns coal into fuel gas, is considered as a cleaner option than burning coal to produce energy. The gas produced through the process can be used to produce gaseous fuels such as hydrogen, methane, methanol and ethanol. Having committed to achieving net- zero carbon emission by 2070, the government has set itself ambitious goals to tap coal for cleaner uses such as gas

BCCL signs 1st MDO contract for coking coal extraction with 3 companies

Aiming to augment the production of coking coal in India, Bharat Coking Coal Limited (BCCL) awarded the work of re-opening, salvaging, rehabilitating, developing, constructing and operating three areas of the PSU for excavation and extraction of coal and its delivery to the authority to three private companies.

RK Transport Co was awarded for Katras Area for a period of 25 (Twenty-Five) years @ 9 percent Revenue share to BCCL. Likewise, M/s Vensar Constructions Company Ltd was awarded for Sijua Area for a period of 25 years @ 7.29 percent revenue share and M/s Eagle Infra India Ltd for a period of 25 years @ 6 percent revenue share for PB area has also been awarded.

Coking coal is a crucial input for the iron and steel industries. India has limited reserves of coking coal. However, in order to reduce its dependence on imports, the government has set the target of 140 MT of coking coal by 2030. While Coal India Limited (CIL) has been given a production target of 105 MT by 2030, others including captive coking coal blocks are to contribute 35 MT.

STEEL

Domestic stainless steel demand will continue to see healthy growth till FY25: Crisil

The domestic stainless-steel demand is expected to grow at a compound annual growth rate (CAGR) of rate of 9 percent in the three fiscals through 2025, double the 4.5 percent pace of the past five fiscals, according to Crisil Ratings. The domestic demand for stainless steel was at four million tonnes (MT) in fiscal 2021-2022, the rating agency said in a report. The demand will be driven by the increasing adoption of stainless steel in railways which is a focus area for government infrastructure spending, and rising application in the automobile and construction sectors.

Adoption of stainless steel is increasing because of its higher durability and lower maintenance. Demand from railways is expected to more than triple by fiscal 2025 and constitute 20 percent of incremental demand for the metal over fiscal 2023-2025.

Demand from other major sectors with the application of stainless steel, including consumer goods (45 percent of demand) and the process industry (25 percent), is also expected to grow at a healthy clip of 7-9 percent over the next 3-5 fiscals given higher consumer spends and recovery in consumption.

Icra revises domestic steel demand outlook to 8 pc for FY24

Icra has revised its outlook for domestic steel demand to 7-8 per cent for the next fiscal. Earlier, the ratings agency had estimated the demand to grow in the range of 6-7 per cent.

In 2023-24, the capital expenditure is budgeted at Rs 10 lakh crore which will constitute 3.3 per cent of GDP. In the ongoing fiscal also, the domestic steel consumption growth has remained strong supported by the government's push for infrastructure-led economic growth. The consumption of finished steel in India was 107.20 million tonne during April-February of FY23.

"With steel consumption expected to grow in high-single digits next year, we expect the industry's capacity utilisation rate to improve to

around 80 per cent in FY2024, despite the commissioning of some new expansion projects." ICRA has noted.

Steel prices may soften on lower China demand: JSW Steel

The upward trend in steel prices may halt and could even reverse in the coming weeks if the market's expectations of a likely demand revival in the biggest global consumer China remain not met, said a senior official of JSW Steel.

Global prices of steel have been on the rise in recent weeks on expectations of higher demand from China as the country eased its strict Covid-19 curbs. Indian steel mills also hiked prices in tandem, reaching around ₹61,000-62,000 per tonne for benchmark hot-rolled coils of steel. The domestic prices were around ₹55,75057,000 in January.

Demand from the Chinese infrastructure segment, which was on a debt-funded growth frenzy over the past several years, is also slowing down. Chinese local government bodies, which led the construction boom, have found themselves under tremendous pressure to repay debt maturities and lenders are not keen to bankroll them anymore, as per reports. This will result in lower demand for steel from China, Rao said. A correction in global prices could happen as early as April.

India to tap new coking coal markets in Mongolia, ramp up production in Mozambique

India is exploring coking coal sourcing options beyond Australia, its largest supplier, as it taps into new markets like Mongolia; while it firms up plans to ramp up production at its own mines in Mozambique in Africa, says NagendraNath Sinha, Secretary, Steel Ministry adding that Discussions are on to increase sourcing of coking coal sourcing from Russia too.

Coking coal imports saw a near 9 per cent rise year-on-year for the April – February period to around 52 mt, with steel mills resorting to sourcing from nations – like Indonesia, Russia, the US, Mozambique and Canada — to counter

price fluctuations and supply issues faced with Australian coking coal.

Discussions are on to increase coal supplies from Russia too, which generally come at an up to 20-30 per cent discount. Trade sources suggest Russian coking coal supplies to India saw a 130 per cent increase, year-on-year, to 2.64 mt (1.15 mt). The International Coal Ventures Private Ltd (ICVL) – a JV of SAIL, NMDC, RINL, CIL and NTPC — owns three coal mines in Mozambique that include Benga, Zambeze and Tete East. Currently, only Benga mine is operational. The total saleable coal (low ash and thermal) production was 1.74 mt in FY22 and it will be around 1.70 mt, this fiscal.

Indian cement sector to grow to 715 - 725Mt/yr in 2027

Credit rating agency Crisil expects the Indian cement sector's capacity to expand at a compound annual growth rate (CAGR) of 4 - 5% over the four-year period up to the end of the 2027 financial year on 31 March 2027.

It would thus begin the 2028 financial year at 715 - 725Mt/yr in installed capacity, compared to 570Mt/yr at the end of the 2023 financial year. The industry's total investment in the expansion is expected to be US$14.5bn. Major multi-state producers are expected to contribute over US$7.25bn (50%) of investments towards the total sum.Over the same period, Crisil expects all-India cement demand to rise at a CAGR of 6 - 7%.

RAILWAYS

Cement Cos. may hike price in April, fuel costs go down

India’s cement manufacturers are expected to announce discounts and schemes to meet their year-end volume targets and price hikes could be there early April 2023, said MotilalOswal.

The cement players attempted price hikes in Feb-Mar'23; however, a significant portion of the hikes was reversed by offering discounts, incentives and price cuts. As a result, the all-India average cement price appears to be flat to marginally negative in 4Q v/s 3QFY23, MOFS said.

The MOFS said cement manufacturers consuming imported coal in the overall fuel mix will report higher reduction in fuel cost than players with higher usage of petcoke in the coming months.

"Imported (South African and Australian) coal price has dipped sharply in the past few months with a 34-54 per cent decline from Dec'22-exit and 28-33 per cent QoQ drop in 4QFY23 QTD. Imported Petcoke price has remained rangebound over the past few months at $165-185/t. Average petcoke price dipped 3-7 per cent QoQ in 4QFY23 QTD," MOFS said.

How freight corridors can make India into a global industrial hub

As some parts of India reeled under massive power outages in April 2022 due to a sharp decline in coal stocks at some of the country’s biggest thermal power plants, one of the government’s recent infrastructure projects—dedicated freight corridors (DFCs)—came to the rescue. Using the DFCs, the government rushed coal from mines in the eastern part of the country to places in the North and West, saving the day. This incident, among others, has firmed up the government’s resolve to expedite work on the under-construction DFCs.

“About 90 per cent of the construction work on the western and eastern dedicated freight corridors will be completed by December 2023,” Ravindra Kumar Jain, MD of Dedicated Freight Corridor Corporation of India (DFCCIL) said. The DFCs are not only an alternative to roads and the Indian Railways, but also complement the existing modes of freight transport. Effective

use of these corridors will help reduce logistics costs and accelerate the development of new industrial hubs.

Railways are about 12 times more efficient in freight traffic and three times more efficient in passenger traffic compared to road transport. Per estimates, the logistics sector is required to grow by 25 per cent to meet the requirement of moving goods. Since 1951, the railway sector’s share as a transporter of freight traffic has declined from 86.2 per cent to 27 per cent. DFCCIL proposes to reclaim the railway’s share in freight traffic by running faster, heavier, higher and longer trains on the upcoming corridors.

SHIPPING

Govt aims to bring down logistics cost to 9% by 2024: Gadkari

The country’s logistics costs, which at present is 16% of India’s GDP, will reduce to 9% by the end of 2024 aided by India’s growing infrastructure, Road Transport and Highways Minister NitinGadkari said.

Logistics cost is around 12% in major European countries and the United States while it is around 8% in China. Lower logistics cost helps optimise cost across the supply chain and makes Indian products competitive in global markets. To accomplish this (reduction in logistics cost), the government is focusing on improving both roadways and railways. It is building green highways and industrial corridor with focus on reducing the distance between major cities and hubs.

Gadkari said that if the logistics cost were to reduce by 7% from 16% to 9%, the country’s will rise by one and a half time.

Coal, crude oil spike lead port cargo charge in FY23, shows govt data

India’s state-owned ports have registered a strong growth during the 11 months of the ongoing financial year due to enhanced supply of imported coal, increased coastal shipping of domestic coal, and rising crude oil imports.

Data released by the government shows that cargo growth in FY23 has been 9.4 per cent, with total volumes at 711 million tonnes (mt). Overseas cargo handled at major ports increased by 10.2 per cent to 546.88 mt during April-February 2022-23 from 496.45 mt during April-February 2021-22, according to data from the ministry of ports, shipping, and waterways (MoPSW).

Coastal cargo handled at major ports increased by 7.1 per cent to 164.67 mt during FY23, from 153.70 mt during April-February, 2021-22. So far, in this financial year, imported and other unclassified coal has seen a spike of 89 per cent during the fiscal, while domestic thermal coal volumes grew by 21 per cent. Crude oil cargo also saw a growth of 13 per cent.

Green Port policy soon with focus on carbon neutrality

India will soon roll out a green port policy to encourage local ports to adopt emerging global standards on carbon neutrality, helping attain the broader long-term national goal of net zero emissions.

Officials said the policy will define the parameters for green port categorisation besides incentives for undertaking the transition toward less polluting fuels and improving efficiency to lower overall emissions.

Indian ports are already proposing to reduce carbon emissions per ton of cargo handled by 30% by 2030. India will be the first country under IMO Green Voyage 2050 project to conduct a pilot project related to Green Shipping.

India's Nationally Determined Contributions (NDC) under the Paris Agreement for the Period 2021-2030 include goals to reduce the emissions intensity of its Gross Domestic Product by 33 to 35% by 2030 from 2005 level.

GLOBAL

ASIA

Thermal coal imports pick up in most Asian buyers as prices moderate

Cheaper prices and rising energy demand are boosting seaborne imports of thermal coal among most, but not all, of Asia’s major buyers of the fuel used to generate power. The world’s two biggest coal producers and importers, China and India, are leading the charge, with March imports expected to hit multi-month highs.

China’s imports of seaborne thermal coal are forecast to reach 26.82 million tonnes in March, according to data compiled by commodity ana-

lysts Kpler. This would be the highest monthly total in Kpler records going back to January 2017, and would be 41% above February’s 19.96 million tonnes and 70% more than the 15.81 million tonnes from March 2022.

The major exceptions to the strong imports of thermal coal in Asia are Pakistan and Japan, although the reasons are vastly different. Pakistan’s March imports are expected to be just 142,441 tonnes, according to Kpler. While this is up from February’s 104,046 tonnes, it’s worth noting that the last four months have been the weakest in Kpler data going back to January 2017, and that Pakistan regularly imported between 1.0 million and 1.5 million tonnes a

month over much of the past six years. Japan’s imports of thermal coal are expected at 10.16 million tonnes in March, the lowest since November.

Indonesia's Feb trade surplus seen shrinking as imports rise for Ramadan

Indonesia's trade surplus likely fell further last month to $3.27 billion as imports rose ahead of the Muslim fasting month of Ramadan, when consumption typically peaks, a Reuter’s poll showed. Southeast Asia's largest economy has been recording trade surpluses every month since May 2020, but they have narrowed in in recent months due to moderating commodity prices. January's surplus was $3.87 billion.

Indonesia is the world's biggest exporter of thermal coal and palm oil. It is also a top supplier of other commodities, like tin, copper, rubber and nickel products. Export growth in February was seen slowing further to 5 per cent on a yearly basis, compared with the previous month's rate of 16.37 per cent, according to a median forecast of 17 economists.

Meanwhile, February import growth was seen jumping to 9.74 per cent from 1.27 per cent in January. Ramadan in Indonesia, the world's largest Muslim-majority country, will start next week. Faisal Rachman, an economist with Bank Mandiri, said rising imports reflected companies' preparations for Ramadan and post-pandemic recovery of manufacturing activities.

Indonesian thermal coal prices largely stable w-o-w

Indonesian thermal coal prices have changed but slightly over the last week. Low-calorific value (CV) coal prices remained unchanged,

while high-CV coal prices dropped by around $4/t. Supplies in Indonesia tightened ahead of Ramadan which began on 22 March, 2023. Also, incessant rainfall in the east and south of Kalimantan have affected coal output.

Most Asian countries such as India and China are heading towards procurement of low-CV Indonesian coal. China and India account for about 50% of total Indonesian exports. Hence a change in Indian and Chinese procurement will result in a change in Indonesian prices and exports.

Thermal coal prices of 4200 GAR coal at Kandla port have been largely stable m-o-m at INR 8,400/t. Indonesia's thermal coal exports increased by 15% m-o-m to 28.14 million tonne (mnt) in February 2023 as against 24.43 mnt in January, CoalMint data showed. China was the largest importer of Indonesian coal at 8.48 mnt in February, up 21% as against 7.02 mnt in January.

Indonesian miners’ credit quality tied to thermal coal for 4 to 5 years more: Fitch

Thermal coal will continue to underpin the credit quality of Indonesian coal-mining companies for the next four to five years, amid a “slow and uneven” phasing out of the fossil fuel in the AsiaPacific, said analysts at ratings agency Fitch Ratings.

ShubhaSethi, a director at Fitch’s Asia-Pacific corporate ratings team, said at a webinar that most coal companies’ plans to diversify away from thermal coal include Greenfield projects that might require more time to finance and execute. And while Indonesia might have sealed a US$20 billion foreign-funded energy transition deal under a Just Energy Transition Partnership (JETP), the deal’s impact will be felt only five to 10 years later.

Sethi cited Indonesian coal giant Adaro Energy’s US$728 million aluminum smelter project as a Greenfield project that would take at least two to three years to execute. The project was announced in December 2022, and sits on a new industrial estate in Borneo. She said that, similarly, Adaro peer Indika Energy was working towards raising non-coal revenue to 50 per cent by 2025.

China leans on coal amid energy security push

Last year, scorching summer temperatures and a drought in China's southwest caused hydropower output to dwindle, leading to power outages. "We will strengthen the basic supporting role of coal (and) take orderly steps to increase advanced coal production while ensuring safety," said the National Development and Reform Commission (NDRC) in a report to the annual gathering of parliament.

China's state planner underlined a greater role for coal in its power supply, saying the fossil fuel would be used to improve the reliability and security of its energy system. Soaring global energy prices following Russia's invasion of Ukraine and domestic supply disruption have prompted Beijing to step up its focus on energy security in recent years.

The world's second-biggest economy relies on coal to generate about 60% of its electricity, but has significantly boosted its use of natural gas and renewable energy in recent years to lower carbon emissions. Fluctuating output from renewable plants, however, has led policymakers to lean on reliable and easily dispatchable coal power to shore up the country's baseload supply. Last year, scorching summer temperatures and a drought in China's southwest caused hydropower output to dwindle, leading to power outages.

China-Australia relations: Chinese buyers snap up more coal as diplomatic relations thaw

China imported US$23.7 million worth of coking coal and US$18.2 million worth of thermal coal from Australia in February, official data showed, after Beijing lifted an unofficial ban on the product that was imposed in 2020.The volume of Australian coking coal entering China reached 72,982 tonnes last month, while some 134,254 tonnes of thermal coal was snapped up by Chinese buyers, according to data released by the General Administration of Customs.

While the imports signal warming relations, the volume is far below the level it was before diplomatic ties took a turn for the worse in mid2020. In February of that year, China imported 3.4 million tonnes of thermal coal and 3.9 million tonnes of coking coal. Chinese imports of Australian coal resumed in February and no year-on-year comparison is available.

This year, however, Chinese buyers have stepped up inquiries about Australian coal with state-run companies showing “renewed interest” due to the quality, price and logistics advantages, according to Harry Huo, the chief editor at The Shanxi-based coal information provider also said “a lot of vessels over two megatonnes” departed Australia in February and were set to arrive in China by March.

AUSTRALIA

Australia to tighten gas, coal emissions rules

The Australian federal Labor government has secured the support of the Greens party in passing its reform to the safeguard mechanism, which is central to a target of reducing

greenhouse gas emissions by 43pc of 2005 levels by 2030.

The Greens backed down on calls to ban all new coal and gas projects but secured an amendment that all new gas developments must have net zero scope 1 emissions. This has derailed the planned onshore wells in the Beetaloo basin and Australian firm Santos' offshore Barossa gas field by increasing cost of development, according to Greens leader Adam Bandt.

Australian Carbon Credit Units (ACCUs) cost around A$38/t ($26/t) on 27 March and will be capped at A$75/t under the scheme. ACCUs peaked around A$57/t in January 2021 before returning to trade between A$25/t and A$35/t since late February 2021, according to the Clean Energy Regulator. EITEs other than coal and gas will be eligible for up to A$1bn in funding, with A$400mn targeted at industries like steel, aluminium and cement that are needed for renewable energy.

Australia's Queensland coal exports at six-year low

Shipments from the four key Queensland coal ports in Australia fell to a six-year low in February owing to flooding and a train derailment but are set to rebound in March. The ports of Hay Point, Dalrymple Bay Coal Terminal (DBCT), Abbot Point and Gladstone shipped 12.37mn t of coal in February, down from a six-month low of 15.45mn t in January and from 14.12mn t in February 2022, according to port data.

The slow start to Queensland coal shipping for 2023 has seen ship queues at the adjacent ports of Hay Point and DBCT remain at an above average 51 as it was in mid-February, but up from 37 in mid-January. The Queue at Gladstone is also longer than normal with 40 vessels waiting at anchor on 14 March, up from 30 on 9 February. This gives the ports an opportunity to ramp

up throughput in March, if coal supply is strong enough

The 55mn t/yr Hay Point, which is operated by BHP Mitsubishi Alliance, had a particularly weak February as it struggled to recover from flooding on delivery pathways in January and worked through some planned maintenance.

Australian Coal Exports Down in 2022, Despite Overall Rise in Seaborne Coal Trade

The seaborne coal market grew by almost 6% during 2022, reversing the negative trend of the previous years. As more countries chose to boost their use of conventional energy, coal was again in high demand. However, Australia’s coal exports were still down last year, mainly as a result of China’s choice of alternative markets for its coal needs. This is expected to change in 2023, as the two countries have mended their relations.

After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the full 12 months of 2022, total global seaborne coal loadings increased by +5.9% y-o-y to 1208.0 mln tfrom 1140.4 mln t in the full 12 months of 2021, although still below the 1275.6 mln t in Jan-Dec 2019. In 3Q 2022, shipments increased again to 317.7 mln t, up +6.3% y-o-y, and just -0.5% from 3Q 2019. In 4Q 2022, loadings were 318.3 mln t, up +13.3% y-o-y from 4Q 2021, and -0.1% from 4Q 2019.

Coal shipments from Australia have drastically affected in recent years by the country being backlisted by Mainland China, previously Australia’s largest customer. That said, Australian exporters have been relatively successful in finding new markets limiting the impact on overall volumes. In 2020, Australian coal exports fell sharply by -7.8% y-o-y to 357.7 mln t, from 388.0 mlntonnes in 2019.

Coal still has an important role to play in South Africa today and tomorrow

In the march to net zero, nations have been criticizing coal for its negative environmental effects: Coal combustion releases pollutants linked to smog and respiratory illness, from carbon dioxide and sulfur dioxide to nitrogen oxides to mercury and lead. On the other hand, coal is an abundant fuel source that is inexpensive to produce and convert into energy. Countries around the world continue to rely on it. That’s certainly the case in South Africa, where the country’s grid system was built around coal.

As the African Energy Chamber’s new report, “The State of South African Energy,” points out, South Africa currently depends on coal for 80% of its power generation. For the people of South Africa, coal is a lifeline. So, yes, I understand the environmental concerns related to coal usage, but they, alone, should not dictate South Africa’s energy decisions. Making a strategic, gradual move away from coal makes sense for South Africa, but to abruptly cease coal usage at this juncture would be detrimental to the nation and its people.

We must be pragmatic about the key role coal plays in South Africa. The chamber’s report does project a decline in coal use, but it will be a slow and steady one. By 2030, we anticipate coal usage to be down from the current 80%, but still hovering around 65%. Clearly, this will still be a large portion of the country’s overall power generation.

South Africa’s Exxaro Resources Says Coal Prices Cooling Off

South Africa’s Exxaro Resources posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warned prices were easing, partly due to high inventories at European power utilities. Exxaro posted a 41% increase in revenue to 46.4 billion rand ($2.53 billion). It realised an average coal price of $251 per tonne last year, up from $96 in 2021, due to a price surge after the European Union banned coal imports from Russia following its invasion of Ukraine in February 2022.

However prices, which started coming off in the final quarter of 2022 due to the European inventories amid milder winter temperatures in October and November, have continued to decline in the New Year, Exxaro’s finance director Riaan Koppeschaar told Reuters.

Like its peers, Exxaro has been trucking some of its coal to ports due to rail capacity problems at South Africa’s state-owned Transnet. Transnet is struggling to haul minerals to port due to the shortage of locomotives and spares as well as cable theft and vandalism of its infrastructure, forcing exporters to resort to rail. But coal volumes moved by trucks, an expensive alternative to rail, are declining due to weaker prices, Koppeschaar said.

South Africa's Thungela expects FY profit to double on hot coal prices

South African thermal coal exporter Thungela Resources TGAJ.J said that it expected to report a 100% increase in 2022 earnings, driven by record high coal prices. In a trading update, Thungela said it expected headline earnings per share (HEPS) between 130 rand ($6.99) and 133 rand ($7.15) for the year ended Dec. 31, up from 61.08 rand in 2021. HEPS is the most common measure of profit in South Africa.

Coal prices surged last year as Russia's invasion of Ukraine in February 2022 worsened an energy crisis that started late 2021. A European ban on Russian coal tightened supplies and

sent prices soaring, boosting the earnings of coal miners from South Africa and elsewhere.

South Africa's coal exports were, however, curtailed by state-owned logistics firm Transnet's inability to operate at full capacity due to a shortage of locomotives and spares, as well as cable theft and vandalism of its infrastructure. Thungela, which was spun off Anglo American Plc AAL.L in 2021 as the global mining giant moves away from coal, will release its financial results on March 27.

UNITED STATES

U.S. coal exports remained relatively unchanged between 2021 and 2022

In 2022, 84.8 million short tons (MMst) of coal were exported from the United States, relatively unchanged from the 85.1 MMst exported in 2021. Steam coal accounted for 45% of all U.S. coal exports in 2022; metallurgical coal accounted for 55%. Steam coal, also known as thermal coal, is used by coal-fired power plants for electricity generation and by consumers to heat their homes or businesses.

In 2022, the five countries that received the most U.S. coal exports were India, the Netherlands, Japan, Brazil, and South Korea. India imported the most U.S. coal for the sixth consecutive year, at 15.5 MMst. Of that total, 55%, or 8.4 MMst, was metallurgical coal. The Netherlands received the second-most U.S. coal in 2022, 11.8 MMst with 54%, or 6.4 MMst, as steam coal. The Netherlands is primarily a transshipment hub that ships coal throughout Europe and retains only 10% of its imported coal for domestic use.

U.S. coal exports to Japan were split almost

evenly between steam (51%) and metallurgical (49%) coal. Almost all U.S. coal shipments (91%) to Brazil were metallurgical coal for steelmaking. Most shipments to South Korea were steam coal for electricity generation (76%).

Renewable energy use surges past coal for first time in the US

More electricity was generated by renewable energy than coal last year, according to the latest government data. The use of wind, solar, hydro, biomass and geothermal also jumped ahead of nuclear power generation, reported the Energy Information Administration (EIA), after first doing so in 2021. The booming sectors of wind and solar were driving the transition to clean energy from planet-heating fossil fuels.

Combined wind and solar increased their share of power sector electricity generation from 12 per cent in 2021 to 14 per cent in 2022. Hydropower stayed the same at 6 per cent in 2022 and biomass and geothermal remained at less than 1 per cent. The share of coal-fired power dropped from 23 per cent in 2021 to 20 per cent in 2022 as some plants were retired, and others used less.

The electric power sector includes major utility companies and independent power producers but not industrial, commercial, or residential sectors, such as rooftop solar panels, for example. Nuclear power declined from 20 per cent in 2021 to 19 per cent in 2022 which EIA attributed to the retirement of the Palisades plant in Michigan.

Eastern US coal price moves likely to stabilize

Illinois basin and Appalachian coal prices in the US are likely headed toward a more stable period following last year's spike and recent steep declines. Thermal coal prices in the Illinois basin

and northern and central Appalachia roughly doubled between October 2021 and July 2022 on better than expected domestic and international demand in the first half of the year as well as limited supply and elevated natural gas prices.

During the height of the price gains, in the first full week of July 2022, Argus' assessment for prompt quarter Illinois basin 11,500 Btu/lb 5lb SO2/mmBtu coal jumped by $45/short ton to a record $200/st fob barge. Shortly before that, prompt quarter CSX rail-originated coal and Pittsburgh Seam coal prices increased by $28/ st and $50/st, respectively, in one week, also to record levels.

The last time prices climbed by similar levels was in 2008, when Argus assessments for Illinois basin and Appalachian coal more than doubled over the span of the first eight to nine months of the year By April 2009, Illinois basin coal was at a 14-month low and Pittsburgh Seam assessments were the lowest since November 2007. Central Appalachian CSX prompt quarter prices reached a 17-month low in May 2009.

that the European Commission again acceded to my appeal – especially when we cut off Russian energy sources and are accelerating the green transition,” tweeted Jerzy Buzek, a former European Parliament President and currently a member of the European Parliament.

The Commission’s decision to allow coking coal to remain on the list will facilitate gaining EU funds for future investments connected to coking coal and creating jobs, said Buzek, adding that coking coal is not only essential for Poland’s steel industry, but also for enabling the construction of wind turbines, solar panels and the development of the railway industry.

Russia has increased its coal exports to China by 214% since last year

Russian coal exports to China through the Zabaikalsk-Majshauli railway crossing have increased by 214% since last year, according to an announcement from the Russian Consulate General in the northeastern province of Harbin. According to the consulate, supplies totaled more than 438,000 tonnes in the first 40 days of 2023, with more than 6,200 freight cars of coal being sent to China.

Coking coal to remain on EU critical raw materials list

The updated list was published as part of the EU’s Critical Raw Materials Act, presented by the European Commission on 16 March. Polish company JastrzębskaSpółkaWęglowa S.A. is the EU’s largest producer of coking coal in the European Union.

“We succeeded! Coking coal will remain a raw material in the European Union. I am pleased

In the Asian nation's Heilongjiang, Jilin and Liaoning provinces, as well as the eastern part of the Inner Mongolia Autonomous Region, Russian coal is used to generate electricity and heat. Russia's Deputy Prime Minister Alexander Novak claimed earlier this month that Moscow plans to increase coal exports to China by 11.2% to 59.5 million tonnes in 2022.

The supply of coking coal to the steel industry has more than doubled as compared to last year. The EU import ban on Russian coal has caused Moscow to refocus its trade, resulting in an increase in Russian coal exports to China. Beijing's industrial activity has recovered after

three years of COVID restrictions, and as a result, the city has significantly increased its coal consumption.

Coal more important as energy source for German electricity production

Coal gained importance as the most important energy source for electricity production in Germany last year. The share of electricity generated from coal-fired power plants, which are considered harmful to the climate, rose by 8.4 percentage points to one-third (33.3 percent) compared with 2021, the Federal Statistical Office said recently. The increase also helped offset sharp declines in electricity production from natural gas due to the Ukraine war and from nuclear power due to the nuclear phase-out, according to the data. The second most important energy source was wind power, whose share rose by 9.4 percentage points to just under a quarter (24.1 percent) after a comparatively windless previous year.

Overall, more than half (53.7 percent) of the electricity fed into the grid last year came from conventional energy sources such as coal, natural gas and nuclear power. However, due to the simultaneous reduction in generation at gasfired and nuclear power plants, the share fell by 8.7 percentage points compared with the previous year.

Due to the tense situation on the gas market

as a result of the Russian war of aggression on Ukraine, significantly less electricity was fed into the grid from natural gas (minus 11.3 percent). Natural gas for power generation has to be imported almost entirely, while Germany is less dependent on imports for coal. Nuclear energy supplied only 6.4 percent of the electricity fed into the grid due to the nuclear phase-out (2021: 12.6 percent).

UK coal demand hits a 266-year low

Coal demand in the United Kingdom fell by about 15 percent in 2022, going so low that it broke a 266-year record. Not since 1757 has the country used so little coal about 6.2 million metric tons, according to a new analysis from the website Carbon Brief. That was just one year after the birth of Wolfgang Amadeus Mozart, the Austrian composer.

“Last time U.K. coal use was this low, Mozart was still in nappies,” tweeted Simon Evans, Carbon Brief’s deputy editor and policy editor. UK Coal demand skyrocketed during the Industrial Revolution of the 18th and 19th centuries and peaked at 221 million metric tons in 1956.

Much of the U.K.’s progress in phasing down coal can be attributed to the country’s 1956 Clean Air Act, which aimed to clean up pervasive air pollution in and around London. More recently, the U.K. has cited climate change in its pledge to stop using coal for electricity generation by October 2024.

MONTHLY FUEL SUMMARY

Indonesian Coal News:

Indonesia’s coal production levels to remain stable or even grow moderately in the medium term and are looking to meet an anticipated growth in power demand from developing Asian economies. Thermal coal will continue to support the credit quality of Indonesian coal-mining companies for the next four to five years, amid a slow and uneven phasing out of the fossil fuel in the Asia-Pacific, said analysts. A director at Fitch’s Asia-Pacific corporate ratings team, said that most coal companies’ plans to diversify away from thermal coal include Greenfield projects that might require more time to finance and execute.

Indonesia has set a tiered coal benchmark price based on calorific value and using a new formula to calculate the price starting in March, the energy ministry said. As per the ministry, the March coal benchmark price was set at $283.08 a tonne for coal with a calorific value of more than 6,000 kilocalories per kilogram, calculated based on an average coal selling price over the previous two months. Indonesia previously used an average price of the main coal indices to calculate the price. The new coal benchmark price came into effect from March 16.

Australian Coal News:

In Australia, benchmark price for coal used in power generation fell back to levels last seen before the Russia- Ukraine war. The weekly spot price for high-grade thermal coal shipped from the Australian port of Newcastle came to around $179.57 per tonne at the end of February, 60% cheaper than its all-time high

in September. The price had soared after the invasion until mid-January, to around $400, as buyers sought alternatives to Russian coal and natural gas. The decline came as gas shortage in Europe reduced. A warm winter meant that less gas was consumed keeping inventories high for this time of year.

Abundant Australian coal supplies are flowing to China opening avenues for shipments in an increasingly oversupplied market this year. In February China saw the arrival of 207,000 tons including 73,000 tons of higher-grade coking coal from Australia as per custom data. The cargoes are Australia’s first set since Beijing imposed its unofficial ban in late 2020. The Chinese market is expected to be buoyant for steelmakers after Mongolia launched a new auction system that raised prices for them.

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 mio t in the first two months of 2023. In addition, last week the visit of the President of South Africa to the event organized by the, 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.

Coal exporting companies in South Africa are registering growth despite of not being able to completely exploit export opportunities due to

rail logistics problems in the country. Exxaro Resources is one such company that reported a 28% jump in its annual profit, supported by higher coal prices, and also declared a lower dividend payout as the miner still faces rail logistics problems. Exxaro said it realized an average coal price of $251 per tonne last year, up from $96 in 2021, due to a price surge after the European Union banned coal imports from Russia following its invasion of Ukraine in February 2022.

European Coal News:

Russian coal exports to China through the Zabaikalsk-Majshauli railway crossing have increased by 214% since last year, according to government sources. Supplies totaled more than 438,000 tonnes in the first 40 days of 2023, with more than 6,200 freight cars of coal being sent to China. The supply of coking coal to the steel industry has also more than doubled as compared to last year. The EU import ban on Russian coal has caused Moscow to refocus its trade, resulting in an increase in Russian coal exports to China. In the Asian nation's Heilongjiang, Jilin and Liaoning provinces, as well as the eastern part of the Inner Mongolia Autonomous Region, Russian coal is used to generate electricity and heat.

The UK is likely to engage in negotiations to keep coal power units open next winter. The system operator confirmed it received a letter from the Department for Energy Security and Net Zero requesting that it explored the procurement of winter contingency contracts for additional capacity over the 2023/2024 winter. The National Grid put coal plants on standby to be used as an emergency backup during the past few months. The new agreements are expected to enable the units to be available again the next winter.

US Coal News:

In the US, Illinois basin and Appalachian coal prices will likely be stable following last year's spike and recent steep declines. Thermal coal prices in the Illinois basin and northern and central Appalachia doubled between October 2021 and July 2022 as domestic and international demand rose in the first half of the year. The last time prices went up by similar levels was in 2008, when Illinois basin and Appalachian coal more than doubled over the span of the first eight to nine months of the year.

US coal exports totaled 42.1mn t in 2022, as per trade data issued recently. The exports were 3.2% higher than a year earlier, while US coking coal output increased by around 3%, according to estimates. Russia's invasion of Ukraine in February 2022 and subsequent sanctions imposed on the import of Russian coal triggered a sharp increase in European buying from the US. US shipments to Japan rose by 21.8% in 2022 to 3.69mn t, largely driven by a period of strong precautionary buying at the start of the Russia-Ukraine war, and by robust demand towards the end of the year as Japanese buyers increasingly turned away from Russian coal.

Pet Coke News:

The global petroleum coke market size is expected to expand at a CAGR of 16.95% reaching USD 24072.74 million by 2028. The growth of the petcoke market is anticipated to depend on factors like surge in demand from major applications industries. Macroeconomic factors like global economic expansion, rapid urbanization, growing middle class population and the increased spending capacity of consumers will also drive the growth of key industries. High cost of products and availability of alternatives is a key factor that has been limiting the demand and adoption of the product in several regions..

Shipping Update:

Rates for Supramax petroleum coke voyages from the US Gulf coast to Rotterdam up over 8% on 14 March. In comparison, coal voyages from the US east coast to Rotterdam on Capesize and Panamax bulkers are down by 4% and 2%, respectively, over the same period. Atlantic Panamax rates have also dropped as the Chinese demand for Panamax-sized grain cargoes that helped to clear tonnage in the region over the last two weeks may now be shifting back to Ukrainian products following the renewal of the Black Sea grain corridor deal with Russia.

European ship-owners welcomed the EU’s proposed Net-Zero Industry Act. The Act can be a step-change in efforts to enhance Europe’s security and to support the energy transition of European industry. The new Industry Act aims to accelerate the decarbonisation of the European economy. As shipping is one of the most difficult to decarbonise sectors, the upscaling of affordable low- and zero-carbon fuels and technologies for the sector is key. The shipping industry is significant for European energy security, food security, and security of supply of goods.

OVERALL DOMESTIC COAL SCENARIO

COAL DESPATCH

SECTOR-WISE COAL DESPATCH (MAR’23)