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Thursday, 14 October 21
SPIKING COAL PRICES: DON’T BLAME THE ENERGY TRANSITION - IEEFA
 Volatility highlights urgency for renewables-based energy solutions
“Energy crisis.” The phrase evokes nearly-forgotten images of gasoline queues in the 1970s, but increasingly describes the spike in global fossil fuel prices. A handful of commenters eagerly lay the blame on renewable energy, which they claim has distracted the world’s attention from investments in oil, gas, and coal production that could have calmed markets.
But a sober analysis suggests that today’s energy price crunch has nothing to do with renewables. After all, price spikes aren’t unique to energy. Computer chips, lumber, copper, and iron ore are among the many commodities and products that have seen global price spikes and shortages this year. As the COVID-19 pandemic raged and then eased—alternately slamming the brakes and flooring the accelerator of the global economy—volatility became the rule rather than the exception.
A close look at the surge in global coal prices is instructive. Prices for some low-grade thermal coals have quadrupled on international markets since last year’s lows. COVID-induced volatility bears much of the blame. But price spike also has its roots in the world’s largest coal market, China, which produces (and consumes) half the world’s coal and meets 60 percent of its energy needs from the mineral.
Over the past year, China has experienced domestic coal shortfalls and shrinking stockpiles that forced the country to boost its imports. Given the country’s outsized appetite for coal, even a modest boost in imports quickly sent seaborne coal prices skyrocketing. The recipe for China’s coal shortages had at least five key ingredients, none related to the country’s renewables policies:
A mine safety crackdown. The Chinese coal mining sector has been a risky business. The state-run Xinhua News Agency reported that 225 coal miners died in China during 2020 in 122 accidents. But in the wake of a cluster of fatalities, federal authorities launched a major safety inspection effort in November 2020. The heightened scrutiny was blamed for a slowdown in production that began in April, a month after China boosted penalties for mine accidents. The prospect of jail time made mining executives reluctant to boost output even as supplies tightened.
Curbs on overproduction. China’s coal mining sector had struggled over much of the past decade with overcapacity that flooded markets with cheap coal—making it hard for many firms to find profits. Last November, just as China’s government was cracking down on coal mine safety, it also stepped up inspections for quota violations—once again making it risky for mining companies to boost supplies.
An anti-corruption campaign in Inner Mongolia. One of China’s most sparsely populated provinces, Inner Mongolia produces roughly one-quarter of the nation’s coal. President Xi Jinping announced in March that the government would investigate coal industry corruption in the region in a campaign that would “never end.” (The campaign focused, in part, on companies producing more coal than their quotas.) Top officials in the regional government have been sent to jail for more than a decade, with one given a suspended death sentence. In early 2021, the government was investigating almost 700 corruption cases involving about 1,000 people. The campaign, which was expanded across the country, also encouraged coal mining firms to curb their production to avoid becoming entangled in an investigation.
A halt to Australian coal imports. Tensions between Australia and its largest trading partner heated up last year, largely due to China’s territorial claims in the Pacific Ocean and the Australian government’s call for a “weapons inspector”-type investigation of the origins of the COVID-19 virus. China responded by blocking Australian coal imports in November 2020. The squabble led Beijing to seek out other markets for coal imports from Indonesia, Russia, the United States and South Africa. The shift contributed to a tripling in the price of lower-grade Indonesia coal over the summer.
Weather: Too cold, too hot, and too wet. An unusually cold 2020-21 winter in North Asia prompted blackouts in some regions. At least nine grid systems in northern provinces recorded record demand in early January. Summer heat waves continued to pressure the coal supply. Now winter approaches, and major power plants reported having about a 10-day stockpile of coal, roughly half of last year’s total. The country, desperate to boost coal consumption, faces a new weather-related obstacle: Record-breaking floods have shut down 60 mines in Shanxi province, a region that produces 30 percent of China’s coal.
These factors, together with COVID, helped precipitate a domestic coal crunch in China that quickly spread around the planet. Those who would blame the growth of renewables for China’s coal shortages are grasping at straws. If anything, ramping up investments in renewables would ease the country’s reliance on volatile, unpredictable fossil fuel supplies.
As for China, so for the world. Until the planet completes its transition to a renewable energy-based economy, supply and demand shocks—such as the ones currently traveling around the globe—will be a fact of life.
By Clark Williams-Derry
Energy Policy Analyst
IEEFA
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Saturday, 11 September 21
RECORD CHINESE COAL FUTURES SIGNAL NEED TO BOOST OUTPUT - REUTERS
China’s coal prices have climbed to a record high, signaling the need for more production in the short term, even as the government tries to ...
Saturday, 11 September 21
IN 2022, EIA EXPECTS U.S. COAL PRODUCTION TO INCREASE BY 47 MMST TO 648 MMST
U.S. Coal production accordng to EIA's forecast, totals 601 million short tons (MMst) in 2021, 66 MMst more than in 2020, EIA's Short-Term ...
Wednesday, 08 September 21
FITCH RATINGS RAISES THERMAL COAL PRICE ASSUMPTIONS ON TIGHT SUPPLY
Fitch Ratings has increased all its Qinhuangdao 5,500kcal/kg price assumptions and short- and medium-term Newcastle 6,000kcal/kg price assumptions ...
Wednesday, 08 September 21
COAL IS STILL KING; INDONESIAN COAL PRICE REFERENCE ABOVE $150 FOR FIRST TIME IN HISTORY
COALspot.com: The Indonesian Coal Price Reference rose dramatically from US$ 127.05 in February 2011, to a peak of US$ 150.03 in September 2021, be ...
Wednesday, 08 September 21
MARKET INSIGHT - INTERMODAL
Last August was extremely hot in the dry bulk market with rates rising at levels that we have years to witness. The dry bulk index exceeded the 4,0 ...
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- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- The University of Queensland
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
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