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Thursday, 26 November 20
DECLINE IN COAL EXPORTS ADDS TO NAVAJO-OWNED COMPANY'S PROBLEMS - IEEFA U.S.
 Weak demand and low prices are likely creating steep losses for NTEC
U.S. coal exports to Asia—once heralded as the saving grace for struggling coal producers in the western United States—are facing new strains from low prices and weak demand in the wake of the global COVID-19 crisis.
In its third-quarter financial statement released earlier this month, Westshore Terminals in British Columbia, the primary terminal for U.S. thermal coal bound for the Pacific Rim of Asia, reported a 47% quarter-over-quarter drop in thermal coal exports. Quarterly thermal coal shipments from the terminal fell to their lowest level since 2016, when global coal markets were overwhelmed by a massive supply glut that sent seaborne coal prices crashing.
Even though the Westshore terminal is in Canada, virtually all of its shipments of thermal coal—the type burned in power plants—come from U.S. mines, mostly located in Montana. Data from the U.S. Mine Safety and Health Administration suggest that Montana’s Spring Creek mine, owned by the Navajo Transitional Energy Company (NTEC), bore the brunt of the decline. Coal production at Spring Creek totaled 2.2 million tons during the third quarter of 2020, down from about 3.9 million tons during the year-ago quarter. On an annualized basis, Spring Creek production has now fallen to its lowest level since 2003 (See Figure 1).
Meanwhile, production at the Signal Peak mine, the other major U.S. thermal coal exporter that ships through Westshore, held roughly steady compared to the year-ago quarter. (Signal Peak has been in the news for other reasons, having to do with a fraud and embezzlement scheme perpetrated by former executives. Signal Peak is partially owned by FirstEnergy, also in the news for fraud allegations.) Westshore doesn’t disclose its customer volumes, but Signal Peak’s relatively stable production during the quarter suggests that NTEC’s Spring Creek mine accounted for the bulk of the decline in thermal coal exports through Westshore.
In a related wrinkle, Westshore reported that it took in “$2.6 million [Canadian] of customer shortfall payments” from July through September. This means that at least one of the terminal’s shippers is paying penalties for shipping less coal than promised.
If last quarter’s shortfall payments are indeed coming from NTEC, the company is probably paying even more in penalties to BNSF, the rail company that moves Spring Creek coal to Westshore. (Documents from the 2019 bankruptcy filing of Cloud Peak Energy, the previous owner of the mine, suggest the company paid a little over $25 per ton in rail fees, more than twice as much as Westshore charges to ship a ton of coal.)
Cloud Peak shelled out millions of dollars in such payments to both BNSF and Westshore during times of low international prices, and—ironically enough—frequently shipped coal at a loss to avoid even steeper losses from contractual penalties.
NTEC touted its purchase in 2019 of Powder River Basin mines as a “prudent investment,” pointing to a study (commissioned by the company itself) arguing that Spring Creek exports held the “potential for high profitability.” Yet Cloud Peak had also had made big bets on Spring Creek exports—and those bets helped cement the company’s financial collapse.
Now, NTEC’s gamble on coal exports is backfiring—just as it backfired on Cloud Peak.
This will only worsen difficulties for NTEC, which has recently agreed to an ill-advised expansion of its stake in the aging coal-fired Four Corners power plant in New Mexico and whose core business—coal production for the domestic electricity industry—is in severe decline, and not just because of COVID but because utility companies continue to aggressively abandon coal for cheaper and more modern forms of generation.
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Wednesday, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
Wednesday, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
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- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
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- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
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- Pipit Mutiara Jaya. PT, Indonesia
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- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
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- Cigading International Bulk Terminal - Indonesia
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- Bangladesh Power Developement Board
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- Australian Coal Association
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- Attock Cement Pakistan Limited
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- Anglo American - United Kingdom
- Deloitte Consulting - India
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- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- White Energy Company Limited
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- Sojitz Corporation - Japan
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
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- Eastern Coal Council - USA
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- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
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- VISA Power Limited - India
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
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- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
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- Indonesian Coal Mining Association
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- Vizag Seaport Private Limited - India
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- Planning Commission, India
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- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
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- Tamil Nadu electricity Board
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- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
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- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
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- Merrill Lynch Commodities Europe
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- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Minerals Council of Australia
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
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- Mintek Dendrill Indonesia
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- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
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- Wilmar Investment Holdings
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- Baramulti Group, Indonesia
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- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- The University of Queensland
- Aditya Birla Group - India
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- Medco Energi Mining Internasional
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