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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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Thursday, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Australian Coal Association
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
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