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Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
 Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newcastle coal future has fallen by almost 50% since the start of 2023 to $196.5/t.
There are a number of reasons for these declines in the two benchmarks, but the main one is competition from natural gas prices, which have reached levels below €50/MW, currently standing at €47.70/MW and down more than 59% since the start of the year. Indicative of this situation, the clean dark spread in Germany, which measures the difference between the wholesale price of electricity and the cost of the coal used to generate that electricity, has reached a multi-year low of -€18.77/MWh, implying that it is not profitable to use coal. Another reason for the fall in prices is the weather. The winter has been milder than expected in both Europe and Japan, meaning that less coal has been used for heating. Although colder weeks are expected, the end of the winter is near. The milder winter is also reflected in the ARA region inventories, which are now almost double the level of a year ago.
Looking at seaborne trade, the EU and UK imported 84.3 Mt of thermal coal in Jan-Nov 2023, 4.6 Mt more (+5.7%) than in the same period last year, while coking coal imports were 29.7 Mt, 8.1% lower than last year. The trade is solid, but the routes have changed. Russia is no longer the top supplier of coking coal, with its share falling from 68% in 2021 to just 4% in 2022. Other countries such as Colombia, the United States, South Africa, Australia and Indonesia have stepped up, increasing the distance travelled to reach Europe.
Although Europe has dumped Russia as a major supplier of coal, Russia has managed to sell it elsewhere. China, for example, bought both thermal and met coal from Russia, benefiting from discounts. In general, China significantly reduced its coal imports by -41 Mt (-15% y-o-y), due to increased Chinese production and some government price controls to limit import demand. Besides China, other countries such as India, Turkey and South Korea were the main destinations for Russian coal.
Looking ahead, the decline in the coal price since the beginning of the year has been significant and it is worth looking at some of the factors that can move the price of coal. First and foremost, the war in Ukraine has the potential to keep supply and demand tight in the near term. If the war continues to rage and coal importers stay away from Russian coal, tone-mile demand is likely to rise, which can further boost the dry bulk market. The same applies if gas prices rise again and coal becomes the fuel of choice for power generation. In fact, the front-year clean dark spread is expected to reach +18.77/MWh, meaning that coal will become more profitable to burn for power generation, thus increasing demand for it.
By Fotis Kanatas
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
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