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China’s coal production achieves double-digit growth for four consecutive months: official data

China’s coal production has maintained a strong momentum since the beginning of 2022, with the domestic output of raw coal from January to April reaching a 10.5 percent year-on-year growth and achieving a double-digit growth for four consecutive months, new official data showed. Among the 10.5 percent growth, the production from the nation’s major coal producing provinces and regions including Northwest China’s Shaanxi Province and Xinjiang Uygur Autonomous Region, North China’s Shanxi Province and Inner Mongolia Autonomous Region accounted for 80.9 percent of the total output, according to data from the National Energy Administration on Wednesday. The National Development and Reform Commission (NDRC), China’s top economic planner, has been strengthening supervision and implementing targeted policies to ensure a stable energy supply and prices. Officials from the NDRC held a video conference recently with a number of coal enterprises in Shanxi on the back of pricing coal sales prices exceeding a reasonable range, the NDRC said on Wednesday. Involved enterprises have made written commitments on strict implementation of relevant policies and keeping the coal prices within the normal range.

China in focus — Expenditure on Russian imports hits $6bn in April

China spent a significant sum on Russian imports despite Western countries drifting away from purchases. Coal imports in the country almost doubled between March and April. In addition to this, Apple Inc announced that it intends to boost production outside the Asian country due to slowing production and slumping demand. Meanwhile, The People’s Bank of China has cut its five-year loan prime rate to help alleviate the country’s struggling housing market. China has spent a total of $6 billion on imports from Russia during the month of April including oil, gas, and coal. Liquified natural gas imports surged 80 percent when compared to a year ago to reach 463,000 tons, Bloomberg reported, citing Chinese customs data. On the other hand, crude imports increased 4 percent year-on-year to reach 6.55 million tons. China’s coal imports surged by around 50 percent between March and April to reach 4.42 million metric tons.

China’s thermal coal futures mute as Beijing reins in commodity inflation

Trade in China’s thermal coal futures has almost come to a halt, after Beijing stepped up its control of coal prices to rein in the soaring costs of energy and raw materials. The flagship product for Zhengzhou Commodity Exchange (ZCE) has at times seen as many as 1 million lots exchange hands in a day but recorded a turnover of just 27 lots on Monday. That was down 99.9% from a year ago and the lowest daily volume since the contract launched in 2015, showed ZCE data. Liquidity started drying up after Beijing intervened in the world’s biggest coal consuming market last September to cool runaway prices. That has hit both trading volume and open interest in the coal futures, two key gauges of activity in derivatives. Open interest on the most-traded September contract was 479 lots, equivalent to 47,900 tonnes of coal, down from a peak of 294,273 lots on April 29 last year.

. Indonesia sets May HBA thermal coal price at $275.64/mt, down $12.76/mt on month

Indonesia’s Ministry of Energy and Mineral Resources has set its May thermal coal reference price — also called Harga Batubara Acuan, or HBA — at $275.64/mt, down $12.76/ mt from April, due to an increase in world coal supply. China and India, the world’s two biggest coal consumers, increased their domestic coal production to reduce imports. “In addition to the increase in production, China’s decision to reduce coal power plants and develop green energy has also contributed to the decline in world coal prices,” Ministry of Energy and Mineral Resources Spokesperson Agung Pribadi said. The decision by the United States and the North Atlantic Treaty Organization, or NATO, to embargo Russian energy supplies led to an increase in the reference coal price in April to $288.40/mt.

TNB remains cautious about higher coal prices

Malaysia (Petaling Jaya) - Tenaga National Bhd (TNB) remains cautious on the prolonged increase in coal price and impact from increased customers’ credit risk outlook, although it foresees a reasonable performance for the year 2022 with the implementation of the Regulatory Period 3, effective from Feb 1.

In a filing with Bursa Malaysia, the group said for its first quarter ended March 31, 2022 (1Q22), it saw resilient performance underpinned by electricity demand growth of 4%, consistent with the overall improvement of Malaysia’s gross domestic product of 5% year-on-year. However, the first quarter also saw the group continuing to face challenges arising from the global increase in coal price and increase in customer’s credit risk. “On-going risks to growth remain, in particular on the expectation of higher core inflation arising from global commodity price surge amid heighten geopolitical conflicts and the on-going Russia Ukraine conflict could have an impact on the country’s economic growth,” said TNB. For 1Q22, the group’s revenue grew 36.4% yearon-year to RM15.658bil while net profit dropped 6.84% year-on-year to RM893.1mil.

Japan’s coking coal imports fall in April

Japan's coking coal imports declined in April on tight global supplies and a slowdown in Japanese automobile production. The country imported 4.74mn t of coking coal in April, down by 16pc from March and by 7pc compared to a year earlier, according to data from Japan's finance ministry. Shipments from the largest supplier Australia fell by 11pc on the month to 2.43mn t in April, and decreased by 14pc on the year. Japan's April crude steel output fell by 6.1pc on the month, hampered by persistent car production cuts. Imports from Canada and the US also decreased by 42pc and 48pc on the month to 395,120t and 369,987t, respectively. Covid-19-related lockdowns in China continued to weigh on global steel production, resulting in Toyota implementing further cuts to MayJune production by 100,000 units. The country's largest car manufacturer has faced renewed struggles to procure semi-conductor and auto parts since March.

Vietnam seeks to boost domestic coal production amid rising import prices

Vietnam's state-owned coal miner Vinacomin will boost domestic production to meet rising demand for the fossil fuel amid surging global prices, the Ministry of Industry and Trade has announced. The Southeast Asian country, a regional manufacturing powerhouse, earlier this year warned of electricity shortages due to tight coal supplies. "Domestic demand for coal is at high levels, especially coal for power generation during the hot months of summer," Vinacomin Chief Executive Officer Dang Thanh Hai said in a statement. Vinacomin, formally known as Vietnam National Coal-Mineral Industries Corp, produced 14.9 million tonnes of coal in the first four months of this year, up 10% from a year earlier, according to the statement. This accounted for 90% of the country's total coal output in the period.

South Africa needs $250B to dump coal

South Africa requires $250 billion in 30 years to shift from its coal-dominated economy onto a greener footing, a report released on the sidelines of the World Economic Forum said on Thursday. Around half of the total investment, $125 billion, is needed to ramp up wind and solar power projects as the country mothballs coalfired plants that currently supply the bulk of its energy needs, the report said. The report was produced by academics at South Africa’s Stellenbosch University in conjunction with the Blended Finance Taskforce. The body was set up in 2017 to help mobilise

large-scale private capital in a bid to end poverty in line with the United Nations’ Sustainable Development Goals. South Africa is the world’s 12th biggest emitter of climate warming gases and the biggest in Africa. In November, the United States, Britain, France, Germany and the European Union agreed to offer an $8.5 billion package to help South Africa accelerate its transition from coal.

Australia’s climate policy direction threatens coal

Australian producer New Hope has moved closer to reopening its 4.8mn t/yr New Acland coal mine in Queensland, although a change in the federal government may disrupt its plans as pressure for a shift in climate policy threatens coal mining. The Queensland Coordinator General has issued a change report for New Acland, which New Hope's management hopes provides a clear pathway for the Queensland state government to approve within weeks the reopening of the mine, which shipped its last coal in December 2021. But the formation of a Labor government in Canberra could at least slow the process, after it was elected on a mandate of reducing carbon emissions. The Labor federal government will govern with a slim majority in the lower house of parliament, after it reached the key 76 seat majority on 30 June. But it will still be reliant on the Greensdominated opposition in the upper house, the Senate, to pass legislation. The Greens campaigned to halt all new coal mines in Australia.

Australian coal on a tear as decoupling from Russia continues

As countries decouple themselves from Russia, the price of coal has reset record highs as major importers turn to Australia for their shipments. Benchmark prices for high-grade Australian coal traded through the Newcastle port continues to climb. Brussels overnight provided its tick of approval for the EU to burn more coal over the next decade, a move that further supports the price boost of coal. Countries like Japan unveiled its ban on Russian coal in April. While South Korea has stopped Russian coal imports in recent months. It wouldn’t be surprising if other countries mirror this move and scramble to find new sources. China is Russia’s biggest customer when it comes to buying coal, followed by Japan and South Korea combined. Elsewhere, India's favourite coal importers are from Australia and Indonesia, accounting for over 70 per cent of overall coal imports, according to Bloomberg. Amid this structural shift, Whitehaven Coal is now debt free, Yancoal reinstated its dividend after strong cash earnings while Terracom paid a lump sum of debt, boding well for a future dividend payment.

BUMA Australia signs contract with Bowen Coking Coal

PT Delta Dunia Makmur Tbk has announced that its subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), through its Australian subsidiary, BUMA Australia Pty Ltd, will immediately commence new mining services for Bowen Coking Coal’s (BCC) Broadmeadow East metallurgical coal project. The new Broadmeadow East contract is valued at AUS320 million, over a three-year term, with the option to extend for a further year (the contract). The project is located 25 km northeast of the township of Moranbah, within the Central Bowen Basin in Queensland. BUMA Australia has successfully operated in the immediate vicinity for 14 years at the BHP Billiton and Mitsubishi Alliance’s (BMA) Goonyella project. The project is expected to produce 4.8 million tpy of ROM coal over four years. The contract also confirms Delta Dunia

Makmur’s strategy of remaining committed to providing end-to-end mining services and adjacent businesses in Indonesia and Australia. 2021 reflected a transformational year for Delta Dunia Makmur and established a strong foundation for the Company’s continued growth. Revenues and EBITDA increased by 51% and 43%, respectively, y/y to USS$911 million and US$234 million. . Europe admits it’ll have to burn more coal as it tries to wean itself off Russian energy

The European Commission has fleshed out details of a plan to ramp up the EU’s renewable energy capacity and reduce its reliance on Russian fossil fuels, at the same time acknowledging that existing coal facilities may have to be used for “longer than initially expected.” A document outlining the Commission’s aims for the REPowerEU plan was published on Wednesday, highlighting the importance of energy savings, the diversification of energy imports and speeding up what it called “Europe’s clean energy transition.” In total, it envisages extra investment of 210 billion euros ($220.87 billion) between 2022 and 2027. When it comes to renewables’ share in the EU’s energy mix, the Commission has proposed that the current target of 40% by 2030 should be increased to 45%. The Commission’s proposals came on the same day the governments of Denmark, Germany, the Netherlands and Belgium said they would aim for a combined target of at least 65 gigawatts of offshore wind capacity by 2030. By the middle of the century, they are aiming for 150 GW of capacity.

Russia doubles coal exports to China in April 2022

Total supplies of Russian thermal and metallurgical coal to China in April reached 4.37 mio t, twice the level of the previous month. Chinese traders, who settled financing and lending issues with their banks, boosted purchases of Russian coal amid soaring prices in Australia. Coal trade between China and Russia came to a standstill in late February, when international banks suspended issuing letters of credit under the threat of Western sanctions. However, as some Chinese banks eased restrictions on financial assets for certain customers, coal trade with Russia resumed in March, although some obstacles, such as shipping and insurance, remain. Russian premium coking coal at seaports in northern China traded at an average of 386 USD/t in April, compared to 473 USD/t for Australian coking coal of similar quality. . Germany puts coal phaseout on hold to prepare for possible Russian gas supply cut

European countries are canceling the closure of coal-fired power plants and getting open-cast mines back to business to prevent a collapse in the energy system if Russia decides to stop supplying them with gas. Germany will keep the power generation fleet in the sector in reserve after the operating permits expire. Germany is preparing the legal framework for the reactivation of the power plants running on fossil fuels which are due to be closed this year and next, according to media outlets that saw the plans. The emergency measure is aimed at offsetting the potential shortage at gas-fired power plants if Russia cuts off supply. Unnamed sources said the government in Berlin would nevertheless remain committed to its 2030 coal phaseout deadline. At the same time, Germany is accelerating the projects for terminals for liquefied natural gas (LNG) and

gas infrastructure and pushing consumers to save energy.

US Coal’s comeback perseveres through mid-2022

American coal prices in the aftermath of the coronavirus have reached unprecedented highs and world events are notching prices even higher see “Russia-Ukraine war likely to bolster U.S. coal imports,” Trains News Wire, March 28, 2022. While coal supply remains tight, continued favorable pricing may increase miningcompany confidence to tap into reserves made cost-effective by today’s spot-market prices, potentially leading to new railroad opportunities. Coal prices continue reaching new highs in most markets. Powder River Basin coal has receded from its December 2021 peak but is still $3 higher per ton than 10-year averages. Compared to the same period a year ago, spot prices per short ton of Illinois Basin coal are up a staggering 255%; Central Appalachia up 110%; Northern Appalachia up 84%, Powder River Basin up 28%; and Uinta Basin up 22%. U.S. railroads have hauled more than 1.1 million coal carloads through May 7, according to Association of American Railroads data, a near 7% increase year-over-year. Year to date, Union Pacific’s coal traffic is up 24% and BNSF Railway’s is up 8%. In the East, CSX’s coal business is down 6% and Norfolk Southern’s is down almost 3% year-over-year.

Warrior Met Coal resumes development of its Blue Creek reserves

US - Warrior Met Coal, Inc. is relaunching the development of its Blue Creek reserves into a new, world-class longwall mine located in Alabama, near its existing mines. Once completed, this transformational growth investment will reinforce Warrior’s position as the premier US pure-play producer of premium metallurgical (met) coal products that are sought by customers throughout the global steel industry. Met coal, unlike thermal coal, has unique physical properties and is used solely for the production of steel. Previously, the company had delayed the development of the Blue Creek reserves due to the uncertainty of Covid-19, as well as market conditions and the labour strike. As market conditions have significantly improved and the company’s cash generation and cash on hand have significantly increased, the company has decided now to move forward with the development

Coal prices are surging, but Appalachian boom unlikely

David Byrd, of Sulphur, Kentucky, is one of the few people left who sell coal for household uses. Think heaters and blacksmiths. And after doing it for 62 years, he can tell the quality of each piece just by feeling them. “See how smooth that is?” he said, picking up a piece he says is high-quality and “pure oil.” Then he finds a piece that flakes apart in his hands — which he says means it’s “kind of trash.” Byrd says he sells one ton of coal (about the amount that could go in the bed of a normalsized pickup truck) for about $185. But with recent changes in the coal market, he could sell it for a lot more. One ton of coal was valued at about $85 last May. Now, it’s worth nearly four times as much, hovering at about $320. What Byrd means is that companies want to ship their coal abroad, on trains just like the one rolling by his house. That’s because European countries boycotting Russian natural gas still need a reliable energy source, says Bill Wolf, a market analyst at mining consulting firm John T. Boyd.

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