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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$116/tonne.
- German Coal Importer Association -
About the German Coal Importer Association
The Verein der Kohlenimporteure e.V. (VDKi) is the lobby organisation for the hard coal import market in Germany. Its German and European members come from the sectors power, industry, trade and logistics. The Association currently has 78 members who consume about 70% of the German demand for hard coal of approximately 61 million tonnes in their facilities. The VDKi clearly represents the major part of the hard coal market (German domestic and imported hard coal) in Germany.
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Tuesday, 26 August 14
GOVT ON TRACK TO LIMIT COAL OUTPUT - THE JAKARTA POST
The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the envir ...
Monday, 25 August 14
4TH ANNUAL FLOATING TERMINALS
4th Annual Floating Terminals
18-20 Nov 2014
Intercontinental Jakarta Midplaza,
Indonesia
Web Site
The Floating Terminal c ...
Monday, 25 August 14
THE BALTIC DRY IS JUMPING, BUT DON'T DRAW ANY BROAD CONCLUSIONS - NASDAQ
Those who consistently preach doom and gloom and see an economic apocalypse around every corner would make me laugh if it weren’t for the fac ...
Monday, 25 August 14
COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX
By Mark Wilcox
Heads of some of the largest coal companies in Wyoming are saying the demise of coal has been exaggerated, though the industry def ...
Monday, 25 August 14
INDO COAL SWAPS W-O-W: NEGATIVE; M-O-M: POSITIVE
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.28%) day on day and US$ 0.65 (-1.19%) per mt week on week. Th ...
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- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- PTC India Limited - India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
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