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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, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- The University of Queensland
- Planning Commission, India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
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