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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, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
Tuesday, 26 October 21
ENERGY CRISIS SHOWS COAL IS AN EXPENSIVE AND UNRELIABLE SOURCE OF ELECTRICITY GENERATION - IEEFA
Any knee-jerk reaction that urges more investment in coal completely misses the point
India is teetering on the brink of joining a growing glo ...
Tuesday, 26 October 21
CHINA TO INVESTIGATE ENERGY INDEX PROVIDERS IN BID TO TAME COAL PRICES - REUTERS
China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contrac ...
Tuesday, 26 October 21
THERE IS PLENTY OF COAL AND GAS IN THE WORLD BUT A VOLATILE MARKET IS NOBODY'S FRIEND - IEEFA
Gas will be winding its way out of the energy system
Gas prices are continuing to surge around the world. The cost of gas is at unpr ...
Tuesday, 26 October 21
AUSTRALIA EXPORTED 51.6 MLN TONNES OF COAL TO INDIA IN FIRST 10 MONTHS, 19% OF ALL AUSTRALIAN COAL EXPORTS; CHINA WAS THE DESTINATION FOR JUST 0.7% - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. In 2021 things started pretty badly, but we are seeing increasing signs of ...
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- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
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