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India to Increase Coal-Fired Capacity in 2024 by the Most in at least 6 years

India will start operating new coal-fired power plants with a combined capacity of 13.9 gigawatts (GW) this year, its power ministry said in a statement to Reuters, the highest annual increase in at least six years.

Prime Minister Narendra Modi’s government has cited energy security concerns amid surging power demand and low per-capita emissions to defend India’s high dependence on coal. Power generation in 2023 increased by 11.3%, the fastest pace in at least five years.

“In the next 18 months, about 19,600 MW (megawatts of) capacity is likely to be commissioned,” the power ministry said in a statement on Thursday. That will include the 13.9 GW likely to be commissioned this year.

The 2024 capacity increase will be more than four times the annual average in the last five years. India added 4 GW of coal-fired power capacity in 2023, the most in a year since 2019.

Coal-fired output surged 14.7% during the year, outpacing renewable energy output growth for the first time since at least 2019. Green energy output rose 12.2% in 2023, an analysis of daily load dispatch data from the federal grid regulator showed.

The south Asian nation failed to achieve a target to add 175 GW of renewable power capacity by 2022. The planned coal-fired capacity increase in 2024 will exceed its 2023 renewables increase of 13 GW.

The Ministry of Power has envisaged adding at least 53.6 GW of coal-fired power capacity over the eight years ending March 2032, it said, in addition to the 26.4 GW currently being constructed. Coal currently accounts for over 50% of India’s installed capacity of 428.3 GW. Construction of coal-fired projects has faced significant delays. However, New Delhi has begun a review of plants whose construction has been held up for years, moving to resolve issues over equipment and land acquisition delays.

Source: TheCoalTrader.com

Asia’s Thermal Coal Trade to Drop in 2024

Thermal coal trade in Asia in 2023 is set to outpace 2022 by 17%, with the biggest driver of this rise being China’s stockpiling of coal, while Vietnam more than doubled imports in the first eight months of 2023, according to the latest Resources and Energy Quarterly report published Dec. 18. The report, which carries the Australian chief economist’s official forecasts for the country’s major commodity exports, stated that world imports are expected to drop by 2.1% in 2024 to allow high inventory levels to normalize, before resuming in 2025 with a 1.5% increase.

“Energy security concerns borne of geopolitical tensions have prompted China to stockpile coal inventories to record levels in 2023. China’s coal inventories have more than tripled over the last couple of years,” the report noted, adding China’s coal-fired power output rose in 2023 despite its announced target of reducing output. Chinese coal imports are forecast to slip to 221 million mt in 2024 and 231 in 2025, down from 302 million mt this year, the forecast showed.

Meanwhile, demand for Australian thermal coal exports remained high in 2023, with shipments to China rising steadily over H1 2023, reaching a peak in June 2023 during China’s peak summer demand. With better weather conditions and increased production from several mines, the forecast stays that export volumes will experience minor growth, from 182 million mt in 2022-23 to 203 million mt by 2024-25.

Source: The Coal Trader | thecoaltrader.com

Australian Coal Exports To China Increase As Trade Barriers Lift

A new government report has found that Australian coal exports to China are increasing on the back of a reduction in trade impediments imposed by the Chinese Government in 2020.

The Department of Industry, Science and Resources’ latest “Resources and Energy” quarterly report found that thermal coal shipments to China are picking up strongly, although they are not yet back to levels reached in 2019–20.

The government noted that thermal coal exports to China grew from nil in December 2022 to 3.6 million tonnes (Mt) by March 2023, coming close to their pre-2020 level. Japan still remains Australia’s largest thermal coal customer, importing 5.9 Mt in March.

Data from the office of Australia’s chief economist also found that the increased Chinese activity has added significant competitive pressure to the market for Australian thermal and metallurgical coal, offsetting some of the impact on prices linked to softer world economic growth and lower energy demand.

Small growth for metallurgical coal

Global metallurgical coal supply is tipped to grow modestly over the next few years, though low investment in expansions and new mines could act as a constraint.

The latest quarterly report expects the metallurgical coal market to remain in a marginal shortfall over 2024 and 2025, keeping prices above their pre-2019 level.

New information also concluded that supply tightness has eased in thermal coal markets as disruptions linked to weather, the rerouting of trade following the Russian invasion of Ukraine, and the constraints of the COVID-19 pandemic dissipated.

Australia’s recent coal shipments have also begun to recover following a long period of weather-related disruptions and the government says the outlook is for greater production and export volumes.

Prices to fall by 2025

However, the government is forecasting that Australian premium hard coking coal price will fall to around $300 a tonne by 2025 from the current estimated average of around $400 a tonne.

The studies have suggested that improving supply conditions from across the globe will be the main driver for the price decline.

It is forecast that Australia will continue to be a significant player in future increases in coal supplies, with the nation’s exports forecast to jump from an estimated 157 million tonnes (Mt) in 2022–23 to 175 Mt in 2024–25, as several new mines open.

As prices decline, the value of Australia’s metallurgical coal exports are also forecast to fall from an estimated $60 billion in 2022–23 to $42 billion in 2024–25.

Thermal coal prices providing strong benefits as exports climb

New data show that Australian thermal coal exports rose from 13.5 Mt in February to 16.3 Mt in March on the back of improved weather conditions.

The result for March was significantly above the 2022 monthly average (of 14.9 Mt), and around 20% higher than in March 2022.

The office of the chief economist noted that despite a recent small decline due to improved global supply conditions, Australia’s thermal coal prices remain relatively high.

But that is set to change dramatically, with the Newcastle benchmark price tipped to fall to almost a third of current prices by 2025.

At the same time, the government is forecasting Australian thermal coal exports to jump from 178 Mt in 2022–23 to 202 Mt in 2024–25.

However, as prices decline, export values are forecast to fall from a peak above $60 billion in 2022–23 to around $30 billion by 2024–25.

New mine activity

Whitehaven’s Vickery project in northern New South Wales is on target to proceed soon with the company announcing a $150 million investment for the start-up of a small-scale version of the mine.

The notably smaller version is expected to only produce around 15% of original plans, however, the board is investigating the potential of investing a further $1 billion to lift production to the original level of around 8 Mt annually.

New Hope Group recently completed its stage 3 extension of the New Acland mine in Queensland.

Output at the mine is expected to climb steadily to 5 Mt annually from 2025, with production expected to recommence in the September quarter.

Source: https://smallcaps.com.au/australian-coal-exports-china-increase-trade-barriers-lift/

India Coal Production Rises 8.4% To 223 Million Tonne In April-June

India’s coal production grew 8.4% during the first quarter of the fiscal year 2023-24 to 222.93 million tonne (MT), the Ministry of Coal said in a statement on Monday.

According to the data released by the ministry, the country’s coal production stood at 205.65 MT during the same period in the previous fiscal year.

“Coal India Limited (CIL) has recorded an impressive growth of 9.85%, with production reaching 175.35MT in FY 2023-24 as compared to 159.63 MT during the same period the previous year. Captive mines /others also saw a growth of 4.74 % touching 30.48 MT in FY 23-24 as compared to 29.10 MT in FY 22-23 during the same period,” the ministry said.

These accomplishments have contributed to the overall positive momentum in the sector, it added.

The surge in coal production has not only boosted overall production but also positively impacted coal dispatches across the country. Cumulative coal dispatches during Q1 of FY 2023-24 reached 239.69 MT (Provisional), showcasing a growth rate of 6.97% compared to 224.08 MT dispatched in Q1 of FY 2022-23. CIL played a crucial role in meeting the growing demand for coal, with dispatches reaching 186.21 MT in Q1 of FY 2023-24, a growth rate of 5.32% from the 176.81 MT dispatched during the same period in the previous year.

Additionally, Singareni Collieries Company Limited (SCCL) and captive mines/others recorded dispatch figures of 18.07 MT and 35.41 MT respectively in Q1 of FY 2023-24, reflecting growth rates of 4.45% and 18.16% as compared to the corresponding period in FY 2022-23.

Furthermore, the upturn in offtake has resulted in a comfortable coal stock position. The total coal stock as on 30 June 2023 has recorded remarkable growth reaching at 107.15 MT (provisional) as compared to 77.86 MT as on 30 June 2022, reflecting a growth of 37.62%. This growth indicates the continued efforts to meet rising demand of coal.

The sustained efforts of the ministry of coal towards enhancing coal production and ensuring seamless dispatch underscores India’s persistence in meeting its energy demands and fostering continuous economic growth.

These positive developments position the nation favourably and contribute to driving the positive trajectory of the country’s energy sector, reinforcing the commitment towards providing uninterrupted power supply and paving the way for Aatmanirbhar Bharat, it added.

Source: https://www.hellenicshippingnews.com/india-coal-production-rises-8-4-to-223-million-tonne-in-april-june-mint/

Global Thermal Coal Prices Settling into $200/T Range After Volatile 2022

SINGAPORE, May 25 (Reuters) – Global thermal coal prices are stabilising this year in a range near $200 a tonne that is less than half of 2022’s record highs, analysts and industry officials say, with rising supplies providing respite to consumers roiled by last year’s volatility.

Analysts expect the benchmark Newcastle coal index to average $175-$212 a tonne this year, a steep premium to the $86 average for the ten years preceding Russia’s 2022 invasion of Ukraine, but down more than 50% from September’s highs at $440.

Last year, punitive Western sanctions on Russia pushed European buyers to pay top dollar for fuel to fire power plants, pushing up global prices. Russia was Europe’s biggest supplier of coal and natural gas before the war.

Coal prices in the tighter range expected this year, though, will help utilities and other users better plan fuel purchases, easing pressure on economies battling high inflation. Fuel prices typically account for more than half the total cost of generating electricity.

Alexandre Claude, chief executive of London-based analytics firm DBX Commodities, said he expects lower volatility in 2023 compared with 2022 because trade flows had stabilised after the “energy shock” that followed the invasion of Ukraine.

Argus Consulting expects global coal exports to rise 4.4% this year, with imports set to increase 5%. China is seen ramping up imports by 11%, with Australian exports rising 9.4% after declining for three straight years.

July Ndlovu, chairman of the World Coal Association (WCA) and chief executive of South Africa’s Thungela Resources (TGAJ.J), said Europe’s “disproportionate” role in deciding coal prices was over.

“Going forward … what happens with China and India is what would drive the fundamentals for energy, because that’s where growth and energy demand is,” Ndlovu told Reuters.

Australia’s Westpac (WBC.AX) said this month it expects the Newcastle benchmark to average $193 per tonne over the nine months ending December 2023, while Citi (C.N) said in April it expected the index to average $175 over 9-12 months. Australia’s chief economist expects Newcastle benchmark prices to average $212 this year.

As of Monday, Newcastle coal was just over $159 a tonne on a free-on-board basis, at the low end of a $159-$179 range it has held during the current quarter and a long way from the $180-$403 band of the first quarter.

“We expect coal prices including the Newcastle benchmark to remain supported mostly due to higher cash (production) costs for the coal miners,” said DBX’s Claude, explaining why prices likely aren’t headed back to pre-invasion, pre-pandemic levels.

DEMAND AND SUPPLY
Top exporters Indonesia and Australia are expected to ramp up shipments to meet higher demand from India and parts of Southeast Asia, making up for small declines in supply from elsewhere including Russia, according to estimates by Australia’s chief economist and Argus.

The Australian chief economist’s office expects supplies from Australia to jump 7.8% and Indonesian exports to rise 2.4%, while imports by Asia rise 2.3% to 852 million tonnes and shipments to Europe fall more than 15%.

Exports from Russia are expected to be lower, Argus and Australia’s estimates show, with the narrowing spread between Russia’s discounted coal and other benchmarks reducing the competitiveness of Russian coal.

Steep discounts to benchmark prices helped Russia lure Asian buyers after the Western sanctions prevented sales to Europe, but that advantage is disappearing.

The forecast for an El Nino weather pattern, typically associated with drier conditions, could also reduce rain-related disruptions to supply and support higher coal output from key regions and ease prices back from the highs of the past year.

A plunge in natural gas prices is expected to aid Europe’s shift away from coal this year as well and that will have a similar effect.

Any indication of a slower-than-expected economic recovery in China, however, could have a larger impact on prices despite this year’s growth in imports and rising domestic coal output.

“Price stability will probably be driven by how the Chinese central government decides in terms of their energy policies,” said WCA Chairman Ndlovu.

Sumber: https://www.reuters.com/markets/commodities/global-thermal-coal-prices-settling-into-200t-range-after-volatile-2022-2023-05-25/

Japan Offers $1.6 Billion to Australia’s Coal-to-Hydrogen Plan

Japan’s government will offer 220 billion yen ($1.6 billion) from a green innovation fund to accelerate efforts in Australia to produce hydrogen for export from coal and biomass.

Partners including J-Power Latrobe Valley, a unit of Japan-based Electric Power Development Co. and Sumitomo Corp. have carried out trials including the delivery last year of the first ever liquid hydrogen shipment from southeast Australia to Kobe. 

The Japan Suiso Energy joint venture aims to begin production in the late 2020s, supplying an initial 30,000 to 40,000 tons a year of clean hydrogen in a process that will use carbon capture technology, the companies said in a Tuesday statement. There’s potential to raise output to as much as 225,000 tons, according to the partners.

“This is a complex project and there is still some way to go in terms of approvals, design, construction and commissioning,” Japan Suiso Energy Chief Executive Officer Eiichi Harada said in the statement. The development has won a commitment of funds from Japan’s 2 trillion yen green innovation fund, Harada said.

Imports of clean hydrogen are seen as an option to help countries like Japan, with little space for wind and solar equipment, to decarbonize their energy systems. However, liquefying hydrogen remains expensive and the fuel is currently cumbersome to transport, challenging its viability.

The vessel carrying the initial Australian test cargo suffered a gas flame incident on its deck while it was berthed at a port in Victoria state, authorities said in a report published last month.

Sumber: https://www.bloomberg.com/news/articles/2023-03-06/japan-offers-1-6-billion-to-australia-s-coal-to-hydrogen-plan

INDONESIA LAUNCHES CARBON TRADING MECHANISM FOR COAL POWER PLANTS

Indonesia on Wednesday launched the first phase of mandatory carbon trading for coal power plants, part of efforts by Southeast Asia’s biggest economy to boost renewable energy and achieve net zero emissions by 2060.

Coal makes up more than half of Indonesia’s power generation. The first stage of a carbon trading mechanism will cover 99 power plants with total installed capacity of 33.6 gigawatt directly connected to power grids owned by state utility Perusahaan Listrik Negara (PLN).

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“There are 500,000 tonnes CO2 equivalent ready to be traded,” said energy ministry official Mohamad Priharto Dwinugroho.

The figure refers to an estimate of the excess emissions over a total 20 million tonnes CO2 equivalent emission quota given to the power plants.

Under the mechanism, power plants that emitted more carbon than their quota can buy carbon credits from plants with below-quota emissions or from renewable power plants.

Dwinugroho said a market mechanism would set the price, but, according to an energy ministry study, the price may range between $2 and $18 per tonne.

Indonesia’s carbon trade applies to power plants with a capacity of at least 100 MW. Energy minister Arifin Tasrif said, however, it would later be rolled out to smaller coal plants and other fossil-fueled power plants, as well as power plants not connected to PLN’s grid.

“Carbon pricing is one of the policies that could increase energy efficiency, reduce dependence on carbon energy, imported energy and can be a source of income for the company and government,” Arifin said at the launch, adding that carbon trading in power generation could reduce carbon emissions by 36 million tonnes by 2030.

Arthur Simatupang, chairman of the Indonesian private power producers association, said power plants could now monetise their efforts to reduce carbon emissions.

One of the world’s biggest greenhouse gas emitters, Indonesia last year set a more ambitious target for reducing carbon emission by 31.89% on its own, or 43.2% with international support, by 2030.

That compared to its 2015 Paris Agreement pledge to cut emissions by 29% or 41% with international help.

Authorities are studying the implementation of a carbon exchange and plan to set up agencies to monitor and verify emission volumes.

Indonesia initially planned to tax the remaining carbon emissions that had not been offset by carbon credits, but the implementation has been delayed.

Sumber: https://www.reuters.com/business/energy/indonesia-launches-carbon-trading-mechanism-coal-power-plants-2023-02-22/

RUSSIAN MINING SECTOR TARGETS ASIAN CUSTOMERS

Russia continues a re-direction of its hydrocarbons and minerals’ exports from Western states to the Asian region, as sanctions’ pressure from West tightens.

As part of these plans, particular hopes are put on coal exports to the region, where the demand for it remains high, especially due to big discounts, provided by Russian suppliers. Russia has already been able to increase its coal deliveries to South Korea, overtaking Australia – the main player in this market in the past.

At present South Korea imports about 2 million tonnes of thermal coal monthly from Russia and there is a possibility that the country’s dependence on Russian coal will only continue to grow.

That will be also due to attractive prices, which are offered by Russian coal producers to their Asian and particular South Korean customers. At the end of December, 6,000 kcal Australian coal cost US$409.5 per tonne, compared to US$244 per tonne for Russian coal.

Russia still remains one of the world’s largest coal producers and exporters with about 442 million tonnes of overall production and 223 million tonnes of annual exports, according to recent data, provided by the Russian Minister of Energy Alexander Novak.

Among the major suppliers of Russian coal to South Korea and other countries of the region are SUEK, Kuzbassrazrezugol, SDS-Ugol and Stroyservis. Still, in contrast to 2022, this year the situation for Russian coal suppliers is more complex. As coal prices in the Asian market fell to their lowest level since April last year, the European market is also seeing negative dynamics, caused by the decline of imports and consumption due to warm weather in Europe.

In the meantime, many Russian mining and metals’ companies are also considering China as one of the potentially biggest sale market for them in the Asian region, although, according to recent report, published by the Russian Aton investment company, there could be serious difficulties for Russian business during their expansion in China, despite the fact that the Chinese market is huge, (accounting for more than 50% of the global consumption of many metals including nickel and copper).  China has a powerful domestic production, so imports account for only 25% of its consumption. According to analysts, this, as well as traditionally lower prices offered by Chinese customers for Russian hydrocarbons and metals seriously limits Russian export potential in this region.  Instead of supplies to the Chinese market, Russia’s metals and mining companies will most likely have to compete with Chinese manufacturers in other countries and territories of the region among which are Malaysia, Vietnam, Taiwan, the Philippines and Indonesia.

At the same time, another problem which seriously complicates the current switch of the Russian metals’ business to the East is logistics, given that the distance of delivery of goods from Russia to East is three times longer those to West (2,300 km versus 7,900 km). This leads to huge additional costs for Russian business during its exports to the Asia Pacific region.

Anyway, despite the existing problems, the Russian metals and mining business will continue its re-orientation on the Asian region, while, according to some preliminary calculations, Russian ferrous metallurgy enterprises will have to reorient about 4 million tonnes of steel products per year to the eastern direction from traditional for them Western markets.

Therefore, as most leading Russian analysts believe, domestic metals and mining exports to the Asian region will increase annually by 10-20% in the coming years. However, it is unlikely that it will be possible to completely redirect export supplies that previously supplied to Europe to the East, since each Asian country has its own maximum level of consumption and reserves.

Still, despite sanctions the supplies of Russian metals to some Western countries are still ongoing, being mainly accounting for some rare and strategic metals and minerals. For example, JSC MMC Norilsk Nickel, the world’s largest producer of palladium and high-grade nickel, has retained its positions in Western markets in the first seven months of 2022, with 50% of its exports still accounting for Europe and 20% for the US.

Sumber: https://resourceworld.com/russian-mining-sector-targets-asian-customers/

By Eugene Gerden

First Australian Coal Cargoes Since End of Ban to Enter China in February

China is set to receive at least two cargoes of Australian coal in early February, according to traders and shiptracking data, the first since an unofficial ban on imports in place since 2020 was lifted earlier this month.

Coal traders will be paying attention to how easily the shipments pass customs for signs that the informal ban is truly over and in the hopes of sending more Australian coal to China.

Australian thermal coal for power generation and metallurgical coal for steelmaking are favoured by Chinese consumers for their high-quality. China’s coal demand is forecast to rise in the upcoming months amid an expected economic rebound after Beijing rolled back its draconian zero-COVID strategy.

About 72,000 tonnes of metallurgical coal was loaded on to bulk vessel Magic Eclipse at Hay Point, Australia, on Jan. 23 and is expected to arrive at the southern Chinese city of Zhanjiang in Guangdong province next week, Refinitiv and Kpler shiptracking data showed.

China’s top steelmaker Baowu Group bought the cargo, according to a trader familiar with the deal and the shiptracking data.

Baowu is one of the four government-backed firms given permission from China’s state planner in early January to purchase Australian coal. The company has 12.25 million tonnes of annual steelmaking capacity at its Zhanjiang base.

Baowu did not immediately respond to Reuters’ inquiry seeking for comment.

Another bulk vessel, the BBC Maryland, is carrying about 12,000 tonnes of thermal coal from the Australian port of Newcastle and heading to the eastern Chinese city of Changshu, Kpler data showed. The cargo is scheduled to arrive on Feb. 10 but it is not immediately clear who the buyer was.

China Energy Investment Corp purchased at least two cargoes of Australian coal, Reuters reported in early January. China’s local media reported that the other two firms given approval to buy Australian coal have also placed orders.

Other Chinese utilities and steelmakers that are not on Beijing’s list of approved importers are still waiting to resume imports.

Customs officials in five major eastern and southern Chinese cities have said that there is no specific requirement for companies importing Australian coal during the customs declaration process.

However, it was unclear if the customs authorities would clear cargoes purchased by companies other than the four approved ones.

Australian thermal coal with a heating content of 5,500 kilocalories was assessed at about $132 a tonne on a free-on-board basis last week, down from about $137 a tonne in early January, according to traders.

Premium low volatile coking coal for delivery on a cost and freight basis to China was assessed at about $320 a tonne last week, up from $315 in early January, the traders said.

Source: Reuters

Indonesia Sets October Coal Benchmark at Record $330.97 Per Tonne – Ministry

Indonesia has set its October coal benchmark price at a record high of $330.97 per tonne, as demand from Europe rises, its energy ministry said on Monday.

The monthly benchmark price in Indonesia, the world’s biggest thermal coal exporter, rose from $319.22 per tonne in September. It also broke the previous record of $323.91 per tonne in June.

“The reactivation of coal power plants in a number of European countries has contributed to the rise of global coal demand,” the ministry said in a statement.

Coal buyers all over Asia, and some from Europe, joined an industry conference on Indonesia’s Bali island late in September to hunt for any coal supply they can secure ahead of winter. Global supply shortages and growing energy security concerns have driven an unprecedented rebound in coal demand.

Western countries have sought to move away from the polluting fossil fuel to slash carbon emissions but demand for coal has surged as governments try to wean themselves off Russian energy while keeping a lid on power prices.