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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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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 ...
Thursday, 14 October 21
EIA FORECASTS U.S. COAL PRODUCTION TOTALS 588 MMST IN 2021, UP 53 MMST YOY
U.S. coal production in EIA's forecasts totals 588 million short tons (MMst) in 2021, 53 MMst more than in 2020.
According ...
Wednesday, 13 October 21
COAL PRICES ARE ROARING BACK AMID A GLOBAL ENERGY CRUNCH - SYDNEY MORNING HERALD
Soaring coal prices have placed Australia’s mining and energy exports on track to reach a record $349 billion this year evenas the value of t ...
Wednesday, 13 October 21
CHINA ISN'T THE ONLY HUGE ASIAN ECONOMY WITH A COAL SHORTAGE NOW - CNBC
China is not the only Asian giant grappling with an energy crunch — India is also teetering on the edge of a power crisis.
Mos ...
Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
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- Bhatia International Limited - India
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
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- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
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- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
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- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
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- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Carbofer General Trading SA - India
- The University of Queensland
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Central Electricity Authority - India
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- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
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- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
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