Global

China coal prices mark worst week since May on govt intervention

China's thermal coal futures plunged in the 3rd week of October and turned in their worst week in five months, following Beijing's strongest intervention in years to boost supply and cool runaway prices of the commodity amid a widespread power crunch. The most-traded contract on Zhengzhou Commodity Exchange, for delivery in January , hit the lower daily trading limit of 14% and settled at 1,408.4 yuan ($220) a tonne. That was nearly 30% below a record high hit and down nearly 15% for the week, the biggest weekly drop since May. Coking coal was down 11% and coke futures fell 9% on the Dalian Commodity Exchange, extending losses from prior sessions. "We're now seeing the fruits of China's supply response, as the government has given miners carte blanche to produce at full tilt - even permitting the relaxation of safety inspections in some cases," said Atilla Widnell, managing director at Navigate Commodities in Singapore. The parabolic pricing action largely represented the fear of buyers being unable to source sufficient volumes to feed power plants and coke ovens.”

China coal futures slump as gov't signals intervention to ease power crisis

China's thermal coal futures fell the maximum permitted 11%, extending losses since last week when Beijing signaled it might intervene to cool surging prices that have led to a power crunch across much of the country. China is pushing miners to ramp up coal production and is increasing imports so that power stations can rebuild stockpiles before the winter heating season, but analysts say shortages are likely to persist for at least another few months. The country's most-active thermal coal futures tumbled the limit-down amount to 1,587.4 yuan

($248.07) per tonne. They closed down almost 20% from the record high of 1,982 yuan per tonne, but are still up about three-fold for the year-to-date. Coking coal and coke futures on Dalian Commodity exchange also fell by their maximum permitted limits of 12%. Coking coal closed at 3,109 yuan/tonne and coke futures plunged to 3,663.5 yuan /tonne.

China’s raw coal output drops in September

China’s raw coal output dropped 0.9 percent year on year to 330 million tonnes last month, data from the National Bureau of Statistics (NBS) showed. The September output represented a 1.8 percent decrease compared with the same period in 2019, the NBS said. The country imported 32.88 million tonnes of coal in September, up 76 percent year on year. In the January-September period, China produced 2.93 billion tonnes of raw coal, up 3.7 percent year on year, or up 3.6 percent from the same period in 2019. In the past nine months, China imported 230.4 million tonnes of coal, down 3.6 percent year on year.

Indonesia to miss 2021 coal output target, minister official says

Indonesia is likely to miss its coal output target this year, an energy ministry official said. Heavy rains are slowing mine and port operations in Indonesia, the world's biggest exporter of coal used for power generation, mining executives have told Reuters. Production is expected to be 610 million tonnes in 202, which is 2.4per cent below the ministry's target of 625 million tonnes. In January to September, coal production was around 450 million tonnes, 72per cent of target. Output was up 8.7per cent to 456.77 million tonnes from 420.29 million in January-September 2020, ministry data showed.

Indoinesia to Prioritize Solar Energy, Increase Power Plant Capacity

The Ministry of Energy and Mineral Resources (ESDM) has started to execute the plan to increase the capacity of new and renewable energy plants or clean energy. The additional capacity would reach 38 Gigawatts (GW) until 2035. ASEAN Power Grid is an interconnection of electricity cooperation to increase the supply in the ASEAN regions. This cooperation will enable cross-regional electricity trade in the future. As quoted from the official website setnas-asean.id, one of the collaborations that has been achieved was the construction of the Sarawak, Malaysia-West Kalimantan interconnection network since 2016. The clean energy power plant plan is part of Indonesia's commitment to implement the Paris Agreement. It also includes Indonesia’s target to reduce greenhouse gas emissions by 29-41 percent by 2030. The energy sector was expected to reduce 314 to 398 million tons of CO2 emissions. The government had designed the net zero emission roadmap for 2021-2060. The main strategy is that the clean energy mix in 2060 could be achieved at 100 percent.

Indonesia's higher coal output target thwarted by heavy rains

Indonesia, the world's biggest exporter of coal used for power generation, is facing challenges in hitting its output target for the fuel because of heavy rains that have slowed activity at key mines in recent months.

Global coal prices have soared to records this year on a recovery in industrial fuel demand and constrained mine output in top coal consumer China. Indonesia targeted a jump in output and exports to capitaliae on the boom, but heavy rains have slowed mine and port operations, mining executives told Reuters. The Energy and Mineral Resources Ministry in April raised its 2021 output target to a record 625 million tonnes, 11 per cent higher than 2020 output, from an initial target of 550 million tonnes, with the higher supply intended primarily for exports. But through September output has risen by only 8.7 per cent from a year earlier to an estimated 456.77 million tonnes, energy ministry data showed, while exports dropped 4.6 per cent to 230.45 million tonnes compared to last year.

South Korean coal prices dip but cold limits downside

China's main economic planning agency the NDRC announced a plan to regulate thermal coal prices, in an effort to cool domestic prices that are at historic highs amid tight availability. This weighed on global coal prices this week. Argus assessed NAR 5,800 kcal/kg coal at $185.83/t fob Newcastle and $223.74/t cfr South Korea this week, down by $22.98/t and $4.90/t on the week, respectively. The delivered price fell less sharply as demand remains firm in South Korea amid an early winter cold spell, while increasing exposure to spiralling spot LNG prices prompted the government to roll back autumn coal-fired capacity restrictions last week. The temperature in South Korea's capital Seoul dropped to as low as 1.3°C on 17 October, a 64-year low for the time of year, according to data published by the Korea Meteorological Administration (KMA). Based on up-to-date daily peak power demand and 17.6GW of scheduled nuclear availability in October, South Korea's power demand could grow by more than 7.5pc on the year this month, which could boost thermal generation by more than 10.5pc on the year, according to Argus analysis. Weak coal demand outlook to persist in Japan

Weakness in regional coal prices also weighed on implied landed coal prices for Japan this week, while there was more thermal power capacity added in recent times amid colder weather across northeast Asia. Daily power demand in Japan fell by 7pc on the week to 90.6GW over the 18-20 October period, although this was still up by 5pc compared with the same period a year earlier. Japanese power demand has trended higher on the year since mid-September amid early cold weather, although it largely remained within the prepandemic range. Temperatures in Japan were forecast to remain below the seasonal average for most days during the next fortnight by as much as 5.01°C, according to Speedwell weather data. Cooler weather year-on-year encouraged the country to add around 2.7GW more thermal generation capacity for the 18-24 October period on the week, but coal-fired availability increased by only 30MW as recent strength in spot coal prices continued to erode the fuel's competitive advantage over utilities' oil-linked LNG term supply.

Australia's South32 says Q1 met coal output drops 15%, sees prices rising

Australian diversified miner South32 Ltd (S32. AX) said higher metallurgical coal prices would help offset a 15% drop in first-quarter production of the steelmaking material. A power crunch, environmental curbs and a debt crisis gripping China's property market

has clouded the outlook for the steelmaking material, sending prices higher. However, supply outside China has so far remained inelastic to the sharp price increases. "While the lower total volumes are expected to adversely impact Operating unit costs, realised prices will benefit due to fewer sales of the lower-priced product and the current strong metallurgical coal market," the company said. Production of metallurgical coal fell to 1.6 million tonnes (Mt) in the three months to Sept. 30 from 1.9 Mt a year earlier, missing RBC's estimate of 1.7 Mt. Metallurgical coal sales, however, rose 1% to 1.5 Mt.

S. Africa's Banks Say They Can't Cut off Funding for Coal Just Yet

South African banks say they have to keep funding at least some coal projects for now because an immediate halt would put huge political and economic strains on a nation that relies on the most polluting of fossil fuels. The top four banks have started to withdraw financing, with Nedbank and FirstRand setting deadlines of 2025 and 2026 respectively to end funding for new thermal coal mines. Both have stopped lending to new coal-fired power plants. But the banks still finance existing coal mines and power stations. Absa and Standard Bank, South Africa's other two leading lenders, have left the door open to funding some new coal mining or power projects. Although coal-related lending makes up a small portion of their loan portfolios, the financing is vital for keeping the lights on and tens of thousands of people employed in Africa's most industrialised economy.

US coal-fired electricity generation on the rise in 2021

The US electric power sector has been generating more electricity from coal-fired power plants this year as a result of significantly higher natural gas prices and relatively stable coal prices. This year, 2021, will yield the first yearover-year increase in coal generation in the US since 2014. Coal and natural gas have been the two largest sources of electricity generation in the US. In many areas of the country, these two fuels compete to supply electricity based on their relative costs. US natural gas prices have been more volatile than coal prices, so the cost of natural gas often determines the relative share of generation provided by natural gas and coal. The overall decline in US electricity demand in 2020 and record-low natural gas prices led coal plants to significantly reduce the percentage of time that they generated power. In 2020, the utilisation rate (known as the capacity factor) of US coal-fired generators averaged 40%. Before 2010, coal capacity factors routinely averaged 70% or more. This year’s higher natural gas prices have increased the average coal capacity factor to about 51%, which is almost the 2018 average.

. US: Union Pacific coal volumes climb to two-year high in Q3: company

Union Pacific's third-quarter coal and renewable volumes rose 8.9% year on year to a twoyear high on strong domestic coal demand, high natural gas prices, and an increase in coal exports, the railroad said The Omaha, Nebraska-based company said in its Q3 earnings statement that coal and renewable carloads totaled 232,000 in Q3, up 17.2% from the prior quarter and up 8.9% from the year-ago quarter. It was the highest quarterly volume since 271,000 in Q3 2019. Generated revenues from the coal and renewables segment also climbed to a two-year high of $531 million in Q3, up from $423 million in Q2 and $387 million in the year-ago quarter.

The average revenue per unit for coal and renewables rose to $2,298/car in Q3, up from $2,134/car in Q2 and $1,820/car in the yearago quarter. The railroad no longer reports stand-alone volume and revenue metrics for its coal segment.

US Coal production is increasing in Montana and Wyoming as demand in the Asia Pacific ratchets up

Coming off a volatile year in 2020, which saw mine closures and furloughs, Montana’s mining industry has turned out 20.3 million tons of coal in the first nine months of 2021. That’s a 2% increase of 524,000 tons over 2020, when the state had two more mines operating than it does currently. Production numbers through Oct. 2 are reported by the U.S. Energy Information Administration. Wyoming production is up 11.8 million tons compared to the first nine months of 2020, a 7% increase. Exports have been a main driver in Montana coal production, explained Steve Read, who manages coal sales for Signal Peak. Exports are the mine’s bread and butter. If there’s coal on a train from Signal Peak, it’s on its way to British Columbia for shipping and most likely bound for Japan. Exports of U.S. steam coal, the kind used in power plants, were up 46.9% through the first half of the year compared to the first six months of 2020. It’s the kind of coal Montana and Wyoming produce.

Russia to export more coal to beat shortage in India

Russia’s Energy Ministry signed an agreement this week with India’s Steel Industry Ministry to increase Russian coking coal supply to India up to 40 million tonnes per year. The deal was inked at the Russian Energy Week Forum, held from October 13 to 15 in Moscow, reported the Russian media. According to Russian Energy Minister Nikolay Shulginov, Russia currently supplies around 80 lakh tonnes of all types of coal to India. The agreement is also meant to stimulate enterprises in Russia and India in the development of coal deposits, the development of coal logistics and infrastructure, the promotion of R&D in production, as well as education and training for the coal industry. The world’s third-largest coal importer, India, is currently struggling with coal shortages. Coal accounts for around 70 per cent of the nation’s electricity generation. Most of India’s coal-fired power plants have critically low levels of inventory amid growing electricity demand.

Bulgaria will not exit coal until 2040

The Bulgarian government has announced that it will not phase out coal until 2040. This makes it the twentieth European country to announce a coal exit date but like other nations such as Germany (2038) and Montenegro (2035), the date is considered far too long away to have the required impacts needed for climate change. That’s the view of green campaigners such as Greenpeace Bulgaria and Europe Beyond Coal, which have already pointed to the fact the Bulgarian coal industry is on the brink of collapse and out of date. Reportedly, an estimated €1 billion (£845m) of upgrades are required to align the country’s coal industry with EU emission standards, with its largest coal power plant in more than €760 million (£642m) of debt. Bulgaria’s date for a coal exit puts it far behind its neighbours – with Greece, North Macedonia and Romania having all announced dates between 2025 and 2032..