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Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
 Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered about 30% of the world’s demand for primary energy of 12.7 billion TOE (tonnes of oil equivalent).
According to the German Federal Institute for Geosciences and Natural Resources (BGR), coal, which has a share of 56% of the reserves and about 89% of the resources of all fossil primary energy sources, has the greatest potential among all of the non-renewable energy sources and has been declared to be the most important energy source.
Hard coal is also broadly distributed over many regions, and calculations by the VDKi based on today’s quantities, prices, and costs indicate that there are sufficient quantities to last for at least another 110 years. Even if a significant coal-exporting country were to prohibit the export of coal tomorrow (speaking theoretically), producing countries on other continents would be able to compensate the loss without any problems.
The VDKi would like to call attention to the fact that the debate on the security of supply has become one-sided and closely focused on securing supply using primary energy sources tied to pipelines. The primary topic is the security of our electric power supply. Coal has a number of advantages in this respect. In contrast to renewable energies, it is available at all times. Moreover, it is not tied to pipeline facilities, can be stockpiled as an energy source right at power plant sites, is found all around the world, and there are many and varied means of transport across both the Atlantic and the Pacific Oceans.
Global hard coal consumption rises by 3%
According to initial estimates by BP in its Statistical Review 2014, global energy consumption of 12.7bn TOE (= tonne oil equivalent = 1 tonne OE = oil equivalent = 1.43 TCE) in 2013 rose by a little less than 2.3% in comparison with 2012 (12.5bn TOE). The background to this development is the low or non-existent growth in many OECD countries such as in Europe and Japan (with the exception of the USA). Coal consumption continued to increase in China (+4.4%) and India (+3.8%), on the other hand, although growth was more moderate than in previous years.
Coal consumption once again posted the strongest rise. In comparison with 2012, there was growth of 3%. The decline in coal consumption in the USA by 11.9% in 2012 was followed by growth of 4.3% in 2013. In terms of the average growth rates of 3.5% over the past five years, coal is and remains the Number 1 source of primary energy in the 21st century and has been the second-most important source of primary energy in the world since 2012, surpassed only by oil.
Estimates by the EU Commission indicate that total primary energy consumption in Europe declined by 0.6% (98m TOE) to 1.49bn TOE. The initial estimates indicate that there has been virtually no change in the mix of primary energy sources used for electric power generation in the EU 28. Hard coal and lignite together maintained their share of 27%, while hard coal alone posted a share of 19% in spite of the massive expansion of renewable energies. However, hard coal output in Europe declined by 15m tonnes to 114m tonnes. On the other hand, hard coal imports to the EU 28 rose by 3m tonnes (+1.4%) to 216m tonnes.
Seaborne world trade in steam coal grows by 6% World trade in hard coal totalling 1,237m tonnes in 2013 represented an increase of 73m tonnes (about 6%) in comparison with the previous year. Seaborne and internal trade posted the following development: in 2013, seaborne trade rose by 60m tonnes to 1,142m tonnes (= +5.5%), while internal trade increased by 18m tonnes (= +16%) to 95m tonnes. The steam coal market grew by 4% (37m tonnes) to a total of 863m tonnes.
Projections from the IEA show that the demand for coal will grow worldwide by an average of 2.3% p.a. over the coming years.
Preliminary calculations by the VDKi for the first four months of 2014 indicate that the seaborne hard coal market worldwide grew by just under 3% (10m tonnes) in comparison with the same period of the previous year.
Coking coal market grows by 9%
Worldwide crude steel production in 2013 reached the level of 1,607m tonnes, a new record. The increase by 3.5% (59m tonnes) occurred mainly in Asia (+6%) and in the Middle East (+2.5%). Crude steel production in Europe, North and South America, Russia and Korea declined by between 1.8% and 4.4%. Pig iron production, the decisive factor for the consumption of coking coal, PCI coal and coke, rose by 52m tonnes (about 5%) to 1,164m tonnes. The coking coal market increased correspondingly by 23m tonnes (+9%) to 279m tonnes.
With the exception of Australia, there were no fundamental changes in the supplier structure. Australia’s market share increased by another 8 percentage points and has now reached the mark of 61%. The USA again lost market share to Australia and now holds a share of 20%.
Hard coal and coke imports to Germany rise by 10%, hard coal consumption increases by 4%
The demand for domestic German and imported hard coal rose by 2.4m TCE (4.1%) to almost 61m TCE in 2013. About 86% of the demand for hard coal was covered by imports; domestic coal today covers only about 14%. Total imports of hard coal and coke reached a new record level of 52.8m tonnes in 2013, an increase by 4.9m tonnes (10%) over 2012.
Most of the hard coal sales go to power plants as the dominant buyers (71%; previous year 66%) and the iron and steel industry (26%; previous year 30%); the heating market (4%) plays only a subordinate role. The import demand for steam coal was covered primarily by Russia, the USA and Colombia, while the primary supplier countries for coking coal were Australia (45%) and the USA (30%).
Power generation from hard coal-fired power plants rose substantially in 2013 thanks to the favourable price situation in comparison with gas and the low CO2 certificate prices in European emission trading. Hard coal-fired power plants supplied 124 TWh of electric power, about 8 TWh (6.5%) more than in the past year, giving hard coal a share of more than 19% in the energy mix in 2013.
The balance in power exchange (total exports less imports) in 2013 amounted to about 34 TWh, an increase of 46% over 2012.
The price advantage of coal over gas (difference between the so-called clean dark spread less clean spark spread) in recent years has fluctuated between €-15 and €-25 per MWh. However, this difference favouring hard coal must not be allowed to obscure the fact that the revenues from power generation are inadequate because of the artificially low prices on the EEX and their unfair competitive advantage created by the priority given to feed-in of renewable energies.
A German hard coal-fired power plant has generation costs of between €50/MWH and €60/MWh, depending on its age. At the moment, however, it receives only about €35/MWh for the generated base load, i.e. it can usually achieve only very low contribution margins, if any at all, with the consequence that power revenues fall far short of covering the total operating costs.
This has prompted Dr Wolfgang Cieslik, VDKi CEO, to call on politicians for action:
“We urgently need a form of regulation which will guarantee hard coal-fired power plants a return to profitability in the long term as well because this is the only course which can guarantee the security and profitability of power supply and the successful realisation of the energy turnaround.”
Despite the increase in steam coal imports of 3.3% in Q1 2014, the VDKi estimates that only 37m tonnes of steam coal and 51m tonnes of hard coal and coke in total will be imported during all of 2014.
Price developments: A surplus in supply meets moderate demand
Developments in which a worldwide surplus in the supply of coal runs into demand which is not growing fast enough began in 2011, and the trend continued in 2013. Prices remained under pressure in 2013 as a result. From October 2013 to today (beginning of July 2014) alone, prices for steam coal fell from US$89/tonne to US$72/tonne, about 20%. The same is true of coking coal prices. Both coking coal and coke prices declined in 2013 because of the general slump in demand accompanied by a simultaneous expansion in supply.
While prices between US$160 and US$165/tonne were still being paid for coking coal at the beginning of 2013, this level had decreased to US$138/tonne by the end of 2013. This development continues to hold sway in 2014; as of the middle of 2014, spot prices for HCC quality had fallen to US$116/tonne.
- German Coal Importer Association -
About the German Coal Importer Association
The Verein der Kohlenimporteure e.V. (VDKi) is the lobby organisation for the hard coal import market in Germany. Its German and European members come from the sectors power, industry, trade and logistics. The Association currently has 78 members who consume about 70% of the German demand for hard coal of approximately 61 million tonnes in their facilities. The VDKi clearly represents the major part of the hard coal market (German domestic and imported hard coal) in Germany.
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Wednesday, 17 September 14
SHIPPING MARKET INSIGHT - GEORGE LAZARIDIS
Since the onslaught of 2013 the rising tide of asset prices had been primarily driven by the increasing freight market conditions and the improving ...
Tuesday, 16 September 14
INDONESIAN GOVERNMENT DECLARED HBA SUFFERED ANOTHER SETBACK IN SEPTEMBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in September. HBA for ...
Tuesday, 16 September 14
INDONESIAN COAL OUTPUT WON'T EXCEED 421M TONS: GOVT - JP
The government is optimistic that it will meet its coal production target for this year, which caps nationwide production at a flat number compared ...
Monday, 15 September 14
CHINA'S COAL PROPOSALS LEAVE SOME HOPE FOR EXPORTERS - DAILY NEWS
When the best thing you can say about new policies is that they aren’t as bad as they could have been, then you know your industry is in deep ...
Monday, 15 September 14
SUB-BIT FOB INDONESIA COAL SWAP, JANUARY 2015 DELIVERY GAINED DAY ON DAY AND WEEK ON WEEK
COALspot.com: Indonesian coal swaps for average October 2014 increased US$ 0.40 (+0.78%) day on day and US$ 0.55 (+1.08%) per mt week on week. The ...
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- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Parliament of New Zealand
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- The University of Queensland
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
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