Global

Coal Seaborne Trade on the Rise in 2021 as new Routes Emerge

Seaborne coal trade has reversed the downward trend of the past couple of years, with 2021 so far being in positive territory. In a recent weekly report, shipbroker Banchero Costa said that “2021 continues to see a steady but consistent recovery in coal demand and therefore also trade. In the first 10 months of 2021, global seaborne coal trade increased by +5.1% y-o-y to 984.7 mln tonnes, from 936.7 mln tonnes in the January-October 2020 period. However, this is still -9.1% down from the 1083.7 mln tonnes in JanOct 2019. The worst this year was in the first quarter, as 1Q 2021 recorded a -8.6% y-o-y decline to 276.7 mln t, which was also a massive -12.6% down compared to the (pre-Covid) first quarter of 2019. In the second quarter of 2021, global coal loadings reached 297.0 mln tonnes, which was +8.2% y-o-y compared to 2Q 2020, and down -10.1 compared to 2Q 2019.

NE Asia coal prices jump on fiercer competition

A cold snap across the northern hemisphere and fiercer inter-basin competition for fuel amid a decline in Russian natural gas deliveries to Europe supported coal prices across northeast Asia this week.

The decline in Russian natural gas deliveries along the 33bn m³/yr Yamal-Europe pipeline at the Mallnow entry point from Germany to Poland and colder weather across the northern hemisphere sent the gas market higher, with the price of solid fuels moving in tandem. Most of Argus' spot coal assessments rose on the week, although China-delivered prices slipped amid ongoing government interventions. Argus assessed NAR 5,800 kcal/kg coal at $144.69/t fob Newcastle and $165.08/t cfr South Korea, up by $20.81/t and $17.15/t on the week, respectively. In South Korea, state-owned Korea Midland Power (Komipo) reportedly purchased a Capesize cargo of NAR 5,400 kcal/kg Canada-origin coal at about fob $141/t on a NAR 6,080 kcal/kg basis for February loading. Allegiance Coal announces first Black Warrior cargo contract

Allegiance Coal Ltd has announced the completion of an agreement for the sale of Black Warrior’s first 80 000 t cargo to an Asian buyer. While the company waits for a pilot coke oven test to be completed on the premium Mary Lee and Blue Creek Top coals, this sale comprising all Black Warrior coals plus other coals available for acquisition, enables us to get Black Warrior coal on to the seaborne market now to take advantage of the current price environment with an alternative product. The price was agreed at a discount to high-vol B due to the untested nature of the coal pending results of the pilot coke oven tests. The laycan is 1 – 10 December 2021. China sees surge in coal transportation by rail, ship.

The volume of coal transported by trains and ships in China saw a surge in October and November amid the country’s solid efforts to ensure stability in coal supply during this winter, official data showed. On average, about 86,300 trains loaded with coal had departed from local areas in China every day from Nov. 1 to 15, marking an increase of around 10,000 trains, or 13.5 percent from last year, data from the China State Railway Group Co., Ltd. showed. During the period, the daily average number of trains loaded with thermal coal reached approximately 62,900, surging 31.8 percent from the same period last year, according to the data. By the end of October, the shipping company affiliated with China Energy, the main force for maritime transportation of coal in the country, had transported 170 million tonnes of coal this year, an increase of 25.6 percent from a year earlier. Thermal coal futures have plunged more than 60 percent to around 800 yuan ($125) a ton from a historic high of nearly 2,000 yuan in midOctober, Zhu said. The state planner last month set an initial target of 1,200 yuan in its most direct intervention yet to cool the market for the key power-generating fuel amid the severe power crunch. China coking coal futures leap on demand optimism

Chinese coking coal futures surged more than 13%, boosted by improving sentiment in the property market and expectations of higher steelmaking demand at mills, although analysts are flagging risks on weak fundamentals. Financial regulators have told some banks to issue more loans to property firms for project development, in efforts to marginally ease liquidity strains across the industry, according to sources. Meanwhile, the industry expects increase in steel production in the coming months after curbing its output more than what authorities required. The most-traded coking coal futures on the Dalian Commodity Exchange DJMcv1, for January delivery, powered as much as 13.5% to 2,170 yuan ($339.71) per tonne. They ended up 12.4% at 2,149 yuan a tonne. Coke futures on the Dalian bourse DCJcv1

jumped 4.8% to 3,050 yuan per tonne at close. Benchmark iron ore futures DCIOcv1 extended gains after hitting a 10% daily trading limit and were up 5.8% to 617 yuan a tonne when market closed. China’s daily coal output stabilizes at 12m tons

China’s daily coal output has stabilized at 12 million tons, amid a raft of measures to ramp up power production, the country’s state planner said. Beijing has been trying to cool a red-hot market for coal, China’s main fuel for power generation, after shortages led to electricity rationing for industry in many regions, adding to factory gate inflation in the world’s second-biggest economy. Coal stocks at ports and power plants have been picking up quickly, with stocks in power plants hitting 129 million tons as of Nov. 14 and expected to hit 140 million tons by the end of November, said state media CCTV Jakarta eyes higher revenue from downstream coal use

The Indonesian government is expecting a significant increase in state revenue once the country's downstream coal industry is developed. It has projected that collections from both non-tax and tax revenue from the industry will reach 136 trillion rupiah ($9.57bn). Derivative products from the industry can replace imported goods, which could reduce foreign imports by up to Rp140 trillion, it said. Indonesia's energy ministry (ESDM) said that the downstream coal market has the capability to be one of the largest industries in the country, given Indonesia's large coal reserves and a growing pushback against coal use as a power generation fuel. The ESDM said that the country has coal reserves of up to 39bn t and estimated resources of 144bn t. But most of this coal is low and medium grade product that fetches lower prices. Coal demand is also expected to decline in the future from a growing pressure to shift to renewable energy and the retirement of coalfired power plants to decrease greenhouse gas emissions. Because of this, the ESDM expects coal use to shift from a fuel source for power generation, to a carbon source for chemical products and carbon raw material. Indonesia 2022 coal consumption for power generation seen at 119 million T - state utility

Indonesia's 2022 coal consumption for for power generation is likely to reach 119 million tonnes, Zulkifli Zaini, CEO of the country's state utility Perushaan Listrik Negara (PLN) told parliament recently. Coal demand by PLN itself is expected at 68.43 million tonnes next year, while 50.76 million tonnes next year, while 50.76 million tonnes is likely to be used by independent power plants, he said. PLN Electricity Still Generated by Coal

State-owned electricity company PLN is currently pushing to construct supporting infrastructures for electric vehicles (EV). However, the electricity production in Indonesia is still mostly generated by coal-fired power plants (PLTU), which continues to contribute to carbon emissions. This was confirmed by PLN executive vice president of marketing and product development Hikmat Drajat. He said 60 percent of the company’s power plants are still composed of PLTUs and that producing electricity that eventually establishes the EV environment cannot be done in a short amount of time. " The power plants that were built about 3 to 4 years ago were still predominantly PLTU, so that currently approximately 60 percent of the composition is still PLTU," said Hikmat at the IEMS 2021 exhibition, November 25. However, he assures that the company is halting the use of coal-fired power plants and is starting to turn to renewable energy power plants through its geothermal power plants or PLTP

Australia’s Whitehaven Coal hit with blasting ban

Australian producer Whitehaven Coal has stopped blasting at its 13mn t/yr Maules Creek thermal and semi-soft coking coal mine in the Gunnedah basin after the New South Wales (NSW) Environmental Protection Authority (EPA) issued a prevention notice. The company is only allowed a maximum of six blasts between 18 November and 13 December and only if it is approved by the EPA under the recommendation of an independent export, according to the prevention notice. Whitehaven has appointed an independent expert to investigate concerns that its blasts are releasing excessive volumes of oxides of nitrogen. It said that overall production at Maules Creek will stay within guidance over the 2021-22 fiscal year to 30 June. It did not comment on the more immediate impact of the blast ban on export sales through the port of Newcastle, although it is likely to be lower over the remainder of 2021. QRC: Queensland’s high-quality coal industry here for the long haul

Queensland coal producers are willing and able to meet the challenges of modern-day mining and will be operating for decades to come as the world turns its attention to using higher-quality, lower carbonemitting coal, the Queensland Resources Council (QRC) has said. QRC Chief Executive, Ian Macfarlane, said having a superior, in-demand product backed by an industry already embracing renewable energy in its operations and heavily investing in low emissions technology will ensure the long-term future of the state’s AUS$28 billion annual export industry and the 300 000-plus Queensland jobs it supports. “Queensland coal mines should be the last coal mines closed in the world because it’s the best quality coal there is, and that goes for our thermal and metallurgical coal,” Macfarlane said. “The world needs Queensland coal more than ever to support the transition to a cleaner, greener and more sustainable future New generation of Australian coking coal emerges

Entrepreneurial coal firms that picked up projects or old mines over the past few years of depressed metallurgical coal prices are already moving ahead with restart projects, like the 1mn t/yr Gregory-Crinum and 1.2mn t/yr Bluff mines in Queensland. Others paused during the Covid-19 pandemic are reinvigorated and pushing toward construction or final approval, such as the 3.5mn t/yr Tahmoor South extension and the 15mn t/yr Olive Downs mine with a stage one phase of 4.5mn t/yr. A new generation of Australian mid-tier firms are developing, with Stanmore taking on UK-Australian mining firm BHP's 80pc stake in the BHP Mitsui Coal (BMC) joint venture, Pembroke pushing forward with Olive Downs, Bowen Coking Coal aiming for 5mn t/yr of mined coal in 2024 and Fitzroy Australia reopening the 1mn t/yr Broadlea mine and starting construction of its 2.7mn t Ironbark No.1 project this year. These firms could replace the mid-tier firms Gloucester Coal, Macarthur Coal and Felix taken over by Glencore, Peabody and Yancoal respectively around 2010 when coal prices were higher than average. Anglo CEO expects investor support for plan to keep ‘met’ coal

Anglo American, which divested its thermal coal mines this year after pressure from investors, plans to retain its steelmaking coal portfolio as it is confident that they will not press for an early exit, the mining group’s chief executive said. Anglo spun out its South African thermal coal operations and sold its stake in a Colombian mine to Glencore GLEN.L after shareholder calls to ditch the more polluting fossil fuel to meet emissions targets. However, the price of thermal coal, which is burned for steam to produce electricity, rose as high as $280 a tonne in the second half of 2021 from as low as $57 in 2020, generating strong returns for the new owners. Anglo also produces metallurgical, known as ‘met’, coal and iron ore, which are key ingredients in steelmaking. Emissions from steelmaking account for up to 9% of the global total and producers are pushing to develop technology to meet global climate commitments.

South Africa Sued Over Plans to Construct New Coal-Fired Power Plants

South Africa’s energy regulator and energy minister have been sued by environmental activists over national plans to allow the construction of new coalfired power plants. Plans for the construction of 1,500 megawatts of coal-fired generation capacity are included in the 2019 Integrated Resource Plan for Electricity and a ministerial determination passed on Sept. 25 last year. “New coal-fired power flies in the face of our constitutional right to an environment not harmful to health and wellbeing, not only for the present generations but for future ones too,” Nicole Loser, Programme Head: Pollution and Climate Change at the Centre for Environmental Rights, a legal group representing the activists, said in a statement

US coal prices jump to highest level since 2009

US coal prices have jumped to their highest level in more than 12 years as the industry scrambles to keep pace with surging demand driven by power producers switching to the heavily polluting fossil fuel. The spot price of coal in the Central Appalachian region — a benchmark for the eastern US thermal coal market — jumped by more than $10 last week to $89.75 per short ton, the highest level since 2009, according to data released from S&P Global. The use of coal has rebounded, driven by stronger electricity demand and a doubling of natural gas prices this year, leading some power generators to switch to the fuel. High international prices have also propelled US coal exports. Four-decade-old US coal advisory council hours may be numbered

A nearly 40-year-old coal advisory council to the U.S. federal government will cease to exist as of Nov. 20 if the Department of Energy does not take action — and the agency has been silent on the body’s fate. Congressional Republicans sounded the alarm on the potential loss of the charter with a letter in October proclaiming the need to preserve the volunteer group. The council, founded in 1984, advises the Secretary of Energy on federal policies that affect coal production, marketing and use. Environmental groups have long criticized the council, whose members are largely representatives from coal miners and associated sectors, for favoring the industry. For President Joe Biden, fresh off of international climate talks in Scotland, the lapsing of the National Coal Council’s charter may be an opportunity to signal to climate hawks his desire to evict coal, a fuel with high greenhouse gas emissions, from the U.S. power system.

Outlook for Canadian coal ‘stronger’ in a de-carbonised future: North Coal CEO

The new chief executive officer of North Coal took the opportunity to talk up his company’s confidence in the future of metallurgical coal during a presentation to the District of Sparwood council this week. North Coal’s development project, the Michel Coal Project, is located to the south east of Sparwood, and is envisioned as a 2 million tonne per year mine with a lifespan of around 25 years. The company projects it would create 500 jobs during construction, and 300 full-time jobs upon completion. It is currently undergoing regulatory assessments, and the company hopes to begin construction in 2025. Ian Maxwell, who has recently taken over as CEO, said that given the current climate and thinking about coal in the aftermath of the 26th United Nations Climate Change Conference (COP26) in Glasgow, “it’s become very clear that there are mixed views on the outlook of coal.”

Colombia sees coal output recovering 20% in 2021 – minister

Colombia’s coal output could recover some 20% in 2021 versus last year, Mines and Energy Minister Diego Mesa said, adding that the government expects to award enough blocks in an upcoming oil auction to meet its four-year target. Coal is a major source of income for Colombia, where production dropped 40% in 2020 to 49.5 million tonnes – an average of just over 12 million tonnes per quarter – due to the twin crises of the coronavirus pandemic and a 91-day strike at major mine Cerrejon. The South American country, a major world producer, saw quarterly coal production before the pandemic of close to 19 million tonnes and is now seeing output of around 13.7 million to 14 million tonnes, Mesa said in an interview with Reuters.