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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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Thursday, 15 December 22
MARKET INSIGHT - INTERMODAL
While observing the ship repair market very close to the end of the year, we are confident that shipyards worldwide are entering a new era. The nex ...
Tuesday, 13 December 22
STRONG COAL PRICES SUPPORT ROBUST EARNINGS AT INDONESIAN COAL MINERS - FITCH RATINGS
Fitch Ratings expects cash flow generation at Indonesian coal miners to remain strong in 2023, based on its forecast for coal prices to remain high ...
Tuesday, 13 December 22
BIMCO CII CLAUSE FINALLY RELEASED: DOES IT MAKE ANY SENSE OF CCI? - WFW
WHAT IS CII?
The new International Maritime Organisation’s (“IMO’s”) Carbon Intensity Indicator (“CII”) cer ...
Tuesday, 13 December 22
COAL BASE RAMPS UP ENERGY SUPPLY FOR WINTER NEEDS - XINHUA
Inner Mongolia Autonomous Region, China’s leading coal production base, has kicked its production into high gear to meet heating needs as col ...
Tuesday, 13 December 22
AUSTRALIA TO CAP PRICES OF COAL, GAS TO DRIVE DOWN ENERGY BILLS - REUTERS
Australia will cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of the ...
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- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
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