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Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
 Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered about 30% of the world’s demand for primary energy of 12.7 billion TOE (tonnes of oil equivalent).
According to the German Federal Institute for Geosciences and Natural Resources (BGR), coal, which has a share of 56% of the reserves and about 89% of the resources of all fossil primary energy sources, has the greatest potential among all of the non-renewable energy sources and has been declared to be the most important energy source.
Hard coal is also broadly distributed over many regions, and calculations by the VDKi based on today’s quantities, prices, and costs indicate that there are sufficient quantities to last for at least another 110 years. Even if a significant coal-exporting country were to prohibit the export of coal tomorrow (speaking theoretically), producing countries on other continents would be able to compensate the loss without any problems.
The VDKi would like to call attention to the fact that the debate on the security of supply has become one-sided and closely focused on securing supply using primary energy sources tied to pipelines. The primary topic is the security of our electric power supply. Coal has a number of advantages in this respect. In contrast to renewable energies, it is available at all times. Moreover, it is not tied to pipeline facilities, can be stockpiled as an energy source right at power plant sites, is found all around the world, and there are many and varied means of transport across both the Atlantic and the Pacific Oceans.
Global hard coal consumption rises by 3%
According to initial estimates by BP in its Statistical Review 2014, global energy consumption of 12.7bn TOE (= tonne oil equivalent = 1 tonne OE = oil equivalent = 1.43 TCE) in 2013 rose by a little less than 2.3% in comparison with 2012 (12.5bn TOE). The background to this development is the low or non-existent growth in many OECD countries such as in Europe and Japan (with the exception of the USA). Coal consumption continued to increase in China (+4.4%) and India (+3.8%), on the other hand, although growth was more moderate than in previous years.
Coal consumption once again posted the strongest rise. In comparison with 2012, there was growth of 3%. The decline in coal consumption in the USA by 11.9% in 2012 was followed by growth of 4.3% in 2013. In terms of the average growth rates of 3.5% over the past five years, coal is and remains the Number 1 source of primary energy in the 21st century and has been the second-most important source of primary energy in the world since 2012, surpassed only by oil.
Estimates by the EU Commission indicate that total primary energy consumption in Europe declined by 0.6% (98m TOE) to 1.49bn TOE. The initial estimates indicate that there has been virtually no change in the mix of primary energy sources used for electric power generation in the EU 28. Hard coal and lignite together maintained their share of 27%, while hard coal alone posted a share of 19% in spite of the massive expansion of renewable energies. However, hard coal output in Europe declined by 15m tonnes to 114m tonnes. On the other hand, hard coal imports to the EU 28 rose by 3m tonnes (+1.4%) to 216m tonnes.
Seaborne world trade in steam coal grows by 6% World trade in hard coal totalling 1,237m tonnes in 2013 represented an increase of 73m tonnes (about 6%) in comparison with the previous year. Seaborne and internal trade posted the following development: in 2013, seaborne trade rose by 60m tonnes to 1,142m tonnes (= +5.5%), while internal trade increased by 18m tonnes (= +16%) to 95m tonnes. The steam coal market grew by 4% (37m tonnes) to a total of 863m tonnes.
Projections from the IEA show that the demand for coal will grow worldwide by an average of 2.3% p.a. over the coming years.
Preliminary calculations by the VDKi for the first four months of 2014 indicate that the seaborne hard coal market worldwide grew by just under 3% (10m tonnes) in comparison with the same period of the previous year.
Coking coal market grows by 9%
Worldwide crude steel production in 2013 reached the level of 1,607m tonnes, a new record. The increase by 3.5% (59m tonnes) occurred mainly in Asia (+6%) and in the Middle East (+2.5%). Crude steel production in Europe, North and South America, Russia and Korea declined by between 1.8% and 4.4%. Pig iron production, the decisive factor for the consumption of coking coal, PCI coal and coke, rose by 52m tonnes (about 5%) to 1,164m tonnes. The coking coal market increased correspondingly by 23m tonnes (+9%) to 279m tonnes.
With the exception of Australia, there were no fundamental changes in the supplier structure. Australia’s market share increased by another 8 percentage points and has now reached the mark of 61%. The USA again lost market share to Australia and now holds a share of 20%.
Hard coal and coke imports to Germany rise by 10%, hard coal consumption increases by 4%
The demand for domestic German and imported hard coal rose by 2.4m TCE (4.1%) to almost 61m TCE in 2013. About 86% of the demand for hard coal was covered by imports; domestic coal today covers only about 14%. Total imports of hard coal and coke reached a new record level of 52.8m tonnes in 2013, an increase by 4.9m tonnes (10%) over 2012.
Most of the hard coal sales go to power plants as the dominant buyers (71%; previous year 66%) and the iron and steel industry (26%; previous year 30%); the heating market (4%) plays only a subordinate role. The import demand for steam coal was covered primarily by Russia, the USA and Colombia, while the primary supplier countries for coking coal were Australia (45%) and the USA (30%).
Power generation from hard coal-fired power plants rose substantially in 2013 thanks to the favourable price situation in comparison with gas and the low CO2 certificate prices in European emission trading. Hard coal-fired power plants supplied 124 TWh of electric power, about 8 TWh (6.5%) more than in the past year, giving hard coal a share of more than 19% in the energy mix in 2013.
The balance in power exchange (total exports less imports) in 2013 amounted to about 34 TWh, an increase of 46% over 2012.
The price advantage of coal over gas (difference between the so-called clean dark spread less clean spark spread) in recent years has fluctuated between €-15 and €-25 per MWh. However, this difference favouring hard coal must not be allowed to obscure the fact that the revenues from power generation are inadequate because of the artificially low prices on the EEX and their unfair competitive advantage created by the priority given to feed-in of renewable energies.
A German hard coal-fired power plant has generation costs of between €50/MWH and €60/MWh, depending on its age. At the moment, however, it receives only about €35/MWh for the generated base load, i.e. it can usually achieve only very low contribution margins, if any at all, with the consequence that power revenues fall far short of covering the total operating costs.
This has prompted Dr Wolfgang Cieslik, VDKi CEO, to call on politicians for action:
“We urgently need a form of regulation which will guarantee hard coal-fired power plants a return to profitability in the long term as well because this is the only course which can guarantee the security and profitability of power supply and the successful realisation of the energy turnaround.”
Despite the increase in steam coal imports of 3.3% in Q1 2014, the VDKi estimates that only 37m tonnes of steam coal and 51m tonnes of hard coal and coke in total will be imported during all of 2014.
Price developments: A surplus in supply meets moderate demand
Developments in which a worldwide surplus in the supply of coal runs into demand which is not growing fast enough began in 2011, and the trend continued in 2013. Prices remained under pressure in 2013 as a result. From October 2013 to today (beginning of July 2014) alone, prices for steam coal fell from US$89/tonne to US$72/tonne, about 20%. The same is true of coking coal prices. Both coking coal and coke prices declined in 2013 because of the general slump in demand accompanied by a simultaneous expansion in supply.
While prices between US$160 and US$165/tonne were still being paid for coking coal at the beginning of 2013, this level had decreased to US$138/tonne by the end of 2013. This development continues to hold sway in 2014; as of the middle of 2014, spot prices for HCC quality had fallen to US$116/tonne.
- German Coal Importer Association -
About the German Coal Importer Association
The Verein der Kohlenimporteure e.V. (VDKi) is the lobby organisation for the hard coal import market in Germany. Its German and European members come from the sectors power, industry, trade and logistics. The Association currently has 78 members who consume about 70% of the German demand for hard coal of approximately 61 million tonnes in their facilities. The VDKi clearly represents the major part of the hard coal market (German domestic and imported hard coal) in Germany.
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Thursday, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
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- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- PTC India Limited - India
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Australian Coal Association
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
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