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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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Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
Wednesday, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- The University of Queensland
- Economic Council, Georgia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
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