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Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
 U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soared in international markets. These high prices should significantly boost revenues and profits at coal mining companies—a remarkable turnaround from just a year ago, when the world’s pandemic-induced economic swoon sent export prices and demand tumbling.
Yet by most measures—including coal production, consumption for electric power, mining jobs and coming coal-plant retirements—the sector will barely rebound to 2019 levels, a far more telling comparison than to 2020, the worst year for U.S. coal in decades.
U.S. coal production
Take U.S. coal production, the broadest measure of the industry’s condition. This year’s output is expected to be 588 million tons, up 10% from 2020’s 535 million tons, according to October’s Short-Term Energy Outlook from the Energy Information Administration. That seems like a decent rebound, but it’s actually 118 million tons lower than in 2019, and, other than 2020, would be the lowest since 1971.
Coal use for electric power
Coal use for electric power is up over last year, too. The EIA’s latest outlook expects an 84-million-ton, or 19%, increase, to 521 million tons, compared with the 437 million tons used in 2020. Once again, this appears to be a substantial recovery—except that it’s lower than 2019’s 539 million tons. This is significant because more than 90% of the coal consumed in the U.S. is used to generate electricity.
This poor recovery in coal use looks even worse considering the price of natural gas rose 83% from $2.47 per thousand cubic feet in the third quarter of 2019 to $4.53 in the third quarter of this year. And, as IEEFA has noted about the energy transition in U.S. electricity markets, coal and gas together have not gained market share, and are instead continuing to lose ground to renewables. This is a trend that will continue for the foreseeable future, given the ongoing construction boom in utility-scale solar and wind. If anything, high prices for coal and gas, if sustained, are likely to cause the switch to renewables to accelerate.
Coal’s domestic market continues to shrink, too. More than 80GW of coal-plant retirements—more than one-third of the current operating capacity—are already scheduled to be retired by the end of 2030. IEEFA estimates these units used 166 million tons of coal in 2019, which would cut demand to about 375 million tons by the end of the decade, and this does not account for any new retirement announcements that could be made. On top of this, the remaining coal plants are likely to run less and less. EIA data shows the capacity factor for coal plants (a measure of how much of their generating potential is actually used) fell from 62.8% in 2011 to just 40.2% in 2020. IEEFA estimates that even a modest decline in capacity factors at the plants expected to operate after 2030 could result in a further loss of more than 80 million tons, bringing the total drop in coal demand from the U.S. power sector to about 250 million tons. In other words, coal’s largest U.S. market could shrink as much as 50% in just nine years.
U.S. coal mining jobs continue to decline
Another sign that coal mining isn’t recovering is the scale and timing of job losses. Nearly 24,000 jobs have been cut—a 29% decline—since 2019, when an average of 81,478 people were working for either coal-mine operators or contractors. This includes a loss of more than 6,100 jobs between 2020 and the first half of 2021, according to the latest figures from the Mine Safety and Health Administration, leaving just 57,497 workers in coal mining. That’s just half the number employed as recently as 2014.
Exports
With surging prices for coal in international markets—a complete turnaround from a year ago—coal exports should be a bright spot for American producers. No doubt for the companies that are exporting, there will be a significant boost to their bottom lines, because volumes are set to grow by 34% this year compared with 2020, to 92.6 million tons. Yet even here, this only returns exports to the 2019 level of 93.8 million tons, and the EIA outlook sees almost no further growth in 2022, when it expects 94.8 million tons to be sold abroad.
It is not surprising that coal has staged at least some comeback over 2020—by many measures the worst year for the industry in decades. What is surprising is that the rebound has fallen short of even 2019 in the critical measures of production, consumption by the power sector and jobs. This year’s high coal prices are likely to improve the weak finances at many mining companies, at least temporarily, but they won’t change the sector’s long-term decline. If anything, the high cost of coal is making the economics of switching to lower-cost renewables and storage even more compelling, and could result in utilities and other power producers accelerating their shift away from using coal.
By Seth Feaster
Data Analyst
IEEFA Energy
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Tuesday, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
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