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Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
 U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soared in international markets. These high prices should significantly boost revenues and profits at coal mining companies—a remarkable turnaround from just a year ago, when the world’s pandemic-induced economic swoon sent export prices and demand tumbling.
Yet by most measures—including coal production, consumption for electric power, mining jobs and coming coal-plant retirements—the sector will barely rebound to 2019 levels, a far more telling comparison than to 2020, the worst year for U.S. coal in decades.
U.S. coal production
Take U.S. coal production, the broadest measure of the industry’s condition. This year’s output is expected to be 588 million tons, up 10% from 2020’s 535 million tons, according to October’s Short-Term Energy Outlook from the Energy Information Administration. That seems like a decent rebound, but it’s actually 118 million tons lower than in 2019, and, other than 2020, would be the lowest since 1971.
Coal use for electric power
Coal use for electric power is up over last year, too. The EIA’s latest outlook expects an 84-million-ton, or 19%, increase, to 521 million tons, compared with the 437 million tons used in 2020. Once again, this appears to be a substantial recovery—except that it’s lower than 2019’s 539 million tons. This is significant because more than 90% of the coal consumed in the U.S. is used to generate electricity.
This poor recovery in coal use looks even worse considering the price of natural gas rose 83% from $2.47 per thousand cubic feet in the third quarter of 2019 to $4.53 in the third quarter of this year. And, as IEEFA has noted about the energy transition in U.S. electricity markets, coal and gas together have not gained market share, and are instead continuing to lose ground to renewables. This is a trend that will continue for the foreseeable future, given the ongoing construction boom in utility-scale solar and wind. If anything, high prices for coal and gas, if sustained, are likely to cause the switch to renewables to accelerate.
Coal’s domestic market continues to shrink, too. More than 80GW of coal-plant retirements—more than one-third of the current operating capacity—are already scheduled to be retired by the end of 2030. IEEFA estimates these units used 166 million tons of coal in 2019, which would cut demand to about 375 million tons by the end of the decade, and this does not account for any new retirement announcements that could be made. On top of this, the remaining coal plants are likely to run less and less. EIA data shows the capacity factor for coal plants (a measure of how much of their generating potential is actually used) fell from 62.8% in 2011 to just 40.2% in 2020. IEEFA estimates that even a modest decline in capacity factors at the plants expected to operate after 2030 could result in a further loss of more than 80 million tons, bringing the total drop in coal demand from the U.S. power sector to about 250 million tons. In other words, coal’s largest U.S. market could shrink as much as 50% in just nine years.
U.S. coal mining jobs continue to decline
Another sign that coal mining isn’t recovering is the scale and timing of job losses. Nearly 24,000 jobs have been cut—a 29% decline—since 2019, when an average of 81,478 people were working for either coal-mine operators or contractors. This includes a loss of more than 6,100 jobs between 2020 and the first half of 2021, according to the latest figures from the Mine Safety and Health Administration, leaving just 57,497 workers in coal mining. That’s just half the number employed as recently as 2014.
Exports
With surging prices for coal in international markets—a complete turnaround from a year ago—coal exports should be a bright spot for American producers. No doubt for the companies that are exporting, there will be a significant boost to their bottom lines, because volumes are set to grow by 34% this year compared with 2020, to 92.6 million tons. Yet even here, this only returns exports to the 2019 level of 93.8 million tons, and the EIA outlook sees almost no further growth in 2022, when it expects 94.8 million tons to be sold abroad.
It is not surprising that coal has staged at least some comeback over 2020—by many measures the worst year for the industry in decades. What is surprising is that the rebound has fallen short of even 2019 in the critical measures of production, consumption by the power sector and jobs. This year’s high coal prices are likely to improve the weak finances at many mining companies, at least temporarily, but they won’t change the sector’s long-term decline. If anything, the high cost of coal is making the economics of switching to lower-cost renewables and storage even more compelling, and could result in utilities and other power producers accelerating their shift away from using coal.
By Seth Feaster
Data Analyst
IEEFA Energy
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Tuesday, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- The University of Queensland
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- ASAPP Information Group - India
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