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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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Friday, 18 September 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
Thursday, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
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- Bulk Trading Sa - Switzerland
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- Ministry of Transport, Egypt
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- International Coal Ventures Pvt Ltd - India
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- Deloitte Consulting - India
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- OPG Power Generation Pvt Ltd - India
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- Chamber of Mines of South Africa
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- Ceylon Electricity Board - Sri Lanka
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- SMC Global Power, Philippines
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- Petrochimia International Co. Ltd.- Taiwan
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- AsiaOL BioFuels Corp., Philippines
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- Parliament of New Zealand
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- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- White Energy Company Limited
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
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- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
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- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
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- Merrill Lynch Commodities Europe
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- Mintek Dendrill Indonesia
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- Ministry of Finance - Indonesia
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- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
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- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
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- Altura Mining Limited, Indonesia
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- Thai Mozambique Logistica
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- Planning Commission, India
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- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- The University of Queensland
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
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- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
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- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
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- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
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- Malabar Cements Ltd - India
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- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
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