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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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Wednesday, 24 November 21
WHY THIS MINING ANALYST IS UPBEAT ON THE IRON ORE PRICE FORECAST - MOTLEY FOOL
In many ways, 2021 can be called the year of the iron ore price. Much of the talk of the ASX town this year has revolved around this key economic m ...
Wednesday, 24 November 21
PRICE OF CHINA’S COAL FUTURE DROPS BY 60% AS NATIONWIDE DAILY OUTPUT REACHES OVER 12 MILLION TONS: NDRC - GLOBAL TIMES
China’s daily coal output has now stabilized after reaching over 12 million tons and the price of coal futures has declined to 800 yuan ($125 ...
Friday, 19 November 21
CHINA: COAL SUPPLIES TO STABILIZE FOR COMING COLD SEASON
China is capable of ensuring stable coal supplies this winter and next spring with the increase in coal production and the rising stockpiles at pow ...
Wednesday, 17 November 21
MARKET INSIGHT - INTERMODAL
It has been another declining week for the dry bulk market and evidently, we are seeing asset values gradually losing momentum as well. Following a ...
Tuesday, 16 November 21
EARNINGS RECOVERY IN INDONESIAN COAL TO CONTINUE THROUGH 2021, BUT SLOW IN 2022 - FITCH RATINGS
The recovery in the operating and financial performance of Indonesian coal miners and coal contractors is likely to slow in 2022, but coal prices s ...
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- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
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