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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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Friday, 26 November 21
CHINA FINDS COMPLIANCE PROBLEMS IN COAL PRICE INDEX PROBE - REUTERS
China’s state planner on Wednesday said it had discovered some “noncompliant” behaviour among coal price index providers as it an ...
Thursday, 25 November 21
SE ASIA POWER DEMAND TO RISE AS STATE SUPPORT MITIGATES COVID-19 IMPACT - FITCH RATINGS
Electricity demand in south-east Asia is likely to increase in 2021, following slow growth or contraction in 2020, thanks to state support that has ...
Thursday, 25 November 21
FITCH RATINGS INCREASES MOST GLOBAL METALS AND MINING PRICE ASSUMPTIONS - FITCH RATINGS
Fitch Ratings has increased most metals and mining price assumptions, particularly those that benefit from increased longer-term demand due to glob ...
Thursday, 25 November 21
CHINA'S COAL PRICE DROPS IN MID-NOVEMBER AMID GOVERNMENT’S SWEEPING MEASURES - GLOBAL TIMES
China’s coal prices have dropped significantly in mid-November compared with the beginning of the month, with the price of coking coal and co ...
Wednesday, 24 November 21
MARKET INSIGHT - INTERMODAL
Inflation is the word that has dominated the meetings of foreign leaders and finance ministers in recent weeks, as rising energy costs, supply chai ...
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- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Australian Coal Association
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
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- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- The University of Queensland
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
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