Seaborne coal market to be undersupplied in 2022: Noble
Seaborne thermal coal demand is expected to hold steady this year, supported by increased demand from India and Europe, with the market expected to be undersupplied, according to commodity trader Noble Resources.
Noble projects this year's global thermal coal demand at 996mn t, against a supply of 983mn t. This scenario could further support international coal prices, which are hovering at multi-year highs. Argus most recently assessed Indonesian GAR 4,200 kcal/kg coal on 16 September at a four-month high of $87.35/t fob Kalimantan.
Indian thermal coal imports this year have remained strong from a year earlier, led by restocking demand by utilities, while gas-coal fuel-switching dynamics favoured European demand for seaborne thermal coal with sharp rises in natural gas prices after the Russia-Ukraine conflict. Noble expects gas prices to remain high, supporting coal demand, said Noble's head of research Rodrigo Echeverri at the Coaltrans Asia 2022 conference.
The European LNG demand is expected to rise further next year but supplies are only expected to increase meaningfully from 2025 onwards, he added. Several European countries including Germany, the UK, and France are bringing mothballed coal-fired units back on line.
Indian authorities have directed the country's utilities to replenish inventories, especially after the April-May heatwave exacerbated stock drawdowns and brought the country to the brink of large-scale blackouts. India is expected to import 171mn t of thermal coal this year, up from 149mn t a year earlier, Echeverri said.
Imported thermal coal demand from the Atlantic region, including European countries, appears to be strong. Thermal coal imports by the Atlantic region — including purchases by European as well as north and south American countries — are expected to end the year at 180mn t, up by 39mn t from last year, he said.
Demand from north and southeast Asian countries is also strong this year, with Japan and South Korea expected to raise imports this year, he added. Rising imports in other markets would partly offset the expected decline in receipts of seaborne coal by China, although demand from Chinese buyers has recovered sharply in the last three weeks.
Chinese thermal coal imports is expected to drop by 45mn t to 210mn t this year, Echeverri said, underscoring weak industrial activity. Slowing economic growth in the second quarter, spurred by renewed Covid-19 lockdowns, is a headwind to demand for the rest of the year. China's domestic output has been steady with January-July production hitting a record 2.6bn t, up by 14.3pc on the year, National Bureau of Statistics data showed.
Indonesia to lead supplies
Seaborne thermal coal supplies this year will be predominantly led by increased shipments from Indonesia, although overall global coal supplies are expected to continue lagging demand.
Indonesian coal exports are expected to rise by 20mn t in 2022 to 467mn t, Echeverri said, still short of the government-set target of 497mn t. Indonesian coal exports rose in July from a year earlier, driven by strong demand from India. It shipped around 44mn t of coal in July, up from 40mn t a year earlier and 41mn t in June, customs data showed. Shipments have recovered from a low of 13mn t in January during the country's export ban.
The increase in Indonesian exports will offset the expected decline in shipments from Australia. Australian thermal coal exports are expected to fall by 13mn t from 2021 to 183mn t this year, he said.
By Saurabh Chaturvedi
Related news posts
Coal developments at odds with Cop fossil fuel pledge
Coal developments at odds with Cop fossil fuel pledge
London, 27 August (Argus) — Coal market developments, particularly in India and China, are at odds with the direction of recent UN climate summits, including Cop 28 in Dubai last year, which set the stage for the "beginning of the end" for the fossil fuel era. Despite calls to accelerate the phase-down of unabated coal-fired power generation, global coal trade is set to reach a record high of more than 1.5bn t this year, surpassing last year's 1.38bn t. Coal-fired power is likely to remain resilient, supported by higher electricity demand growth in China and India, according to energy watchdog the IEA. A total 15.6GW of coal-fired power capacity was added in the first half of this year, mostly in Asia-Pacific. This was far more than the 12GW that retired globally over the same period, and does not account for an additional 227.5GW that was still under construction as of the end of June, according to US-based Global Energy Monitor. Current global operational capacity of 2.12TW is down only slightlyfrom 2023's record 2.13TW. China and India's intentions for coal are key for global climate goals — they account for 203GW of the capacity under construction — but Beijing and New Delhi unsurprisingly watered down a coal deal at Cop 26 in 2021. China has not set a new nationally determined contribution, or climate plan, since 2021, but it is expected to ramp up its ambitions in a new plan by the start of 2025. It admitted its heavy dependence on coal is straining its environmental goals.China's coal imports grew by 12pc on the year to a record high in January-June. China's coal-fired generation increased by 1.5pc on the year to 3,000TWh in the first half of 2024, Argus data show, although solar and hydropower output also rose. Assuming a stronger rebound in hydropower generation over the rest of this year, China's coal-fired generation could be static or fall slightly, according to the IEA. And China last month announced its plans to explore co-firing renewable ammonia and biomass at its coal-fired plants, as well as carbon capture, utilisation and storage for some projects by 2025. India's coal-fired generation will remain robust and is likely to increase by 7pc this year, according to the IEA. The country experienced a prolonged heatwave in the first half of this year, causing coal-fired generation to rise by 10pc to 676TWh over the period, according to Argus data. The IEA expects higher renewable power output in India will limit the increase in coal-fired generation to 2pc in 2025. Vicious cycles? India and Indonesia are strongly encouraging higher coal production to ensure energy security. In tandem, record temperatures and a prolonged heatwave across most of Asia has boosted power demand this year, straining grids and causing power cuts. Vietnam is also an increasingly important consumer and is set to become the third-largest coal importer by 2035 — behind only China and India. Vietnam has 27.2GW of operating coal-fired capacity at present, and an additional 6GW is in the pipeline. Coal continues to play a key role in the country's $15.8bn Just Energy Transition Partnership plan, which is supposed to help decarbonise its economy. Peak power demand is met by coal in Vietnam, India, Indonesia and China. Unlike in Europe, where the coal-fired fleet is older, it is harder to make an economic case for retiring Asia-Pacific's newer plants, and the region's grids do not yet have the flexibility to replace base-load power. This year has brought some progress in developed economies, with G7 leaders committing to a coal phase-out by 2035. But no concrete policies have been passed, and the countries limited themselves to calling for reducing coal use "as much as possible" — providing room for manoeuvre for Germany, Japan and the US. By Ashima Sharma and Joseph Clarke Global coal-fired capacity TW Global coal capacity additions, retirements MW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia eyes retiring 13 coal-fired power plants
Indonesia eyes retiring 13 coal-fired power plants
Manila, 27 August (Argus) — Indonesia's energy ministry (ESDM) is looking to retire 13 coal-fired power plants before 2030, as part of the country's efforts to cut emissions in line with its net zero goals. The ESDM identified the 13 coal-fired power plants through a study jointly conducted by the Bandung Institute of Technology (ITB) and the United Nations Office for Project Services (UNOPS), it said. The 13 plants were identified as candidates for early retirement based on multiple factors such as economic life, electricity production offtake, and emission levels in relation to electricity produced, the ESDM said. The units have an estimated total capacity of 4.8GW and collectively produce roughly 48mn t of CO2 equivalent (CO2e), it added. The ministry did not indicate the 13 plants' coal consumption volumes. All 13 units are owned by state-owned utility PLN, which could make them easier to shut down compared to independent power producers which are owned by private-sector companies. The ESDM did not identify the 13 plants, but it named three locations which it will be prioritising. It is looking to close part of the 4GW Suralaya power complex in Banten province, specifically the older units which have been operational since 1984. These units are nearing the end of their economic life and have high emissions output, making them prime candidates for early retirement. Another power plant complex identified in the study is PLN's unit at the 4GW Paiton power complex. The ESDM also aims to retire the 200MW Ombilin plant in west Sumatra as the plant is utilised mainly as a peaking plant, which is a facility that operates only when there is a need for additional power. This means its shutdown will have minimal impact on the community, the ESDM said. The ESDM is currently drafting a ministerial regulation to retire the identified power plants. The said regulation will also serve as a reference for future early retirement efforts. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Adani Power to acquire Amarkantak thermal unit
India’s Adani Power to acquire Amarkantak thermal unit
Singapore, 26 August (Argus) — Indian private-sector utility Adani Power is acquiring thermal generation capacity and an under-construction expansion from domestic debt-ridden Lanco Amarkantak Power. Adani Power will pay 41bn rupees ($489mn) to acquire a 100pc stake in the Amarkantak project. Amarkantak is a 600MW thermal power plant in central India's Chhattisgarh state, with 1.32GW being added with the second phase of the project, Adani Power said. The acquisition has been approved by relevant authorities under a corporate insolvency resolution process. The acquisition is scheduled to be completed by 20 October this year. Amarkantak has a 2.78mn t/yr term supply arrangement with SECL, a subsidiary of state-controlled producer Coal India. It recorded revenues of Rs13.08bn in the April 2023-March 2024 fiscal year. Adani Power continues to boost capacity through acquisitions and organic growth when most of the country's private-sector utilities have stopped expanding coal-fired power generation to focus exclusively on renewables. It operates 15.25GW of domestic thermal generation capacity in Gujarat and Maharashtra states of west India, Madhya Pradesh and Chhattisgarh in central India, Rajasthan in north India, Karnataka in south India and Jharkhand in east India. The company aims to have installed generation capacity of more than 30GW by 2030. The Amarkantak acquisition raises its current operating capacity to 15.8GW. Adani Power is also in the process of acquiring a 1.2GW thermal power project in south India's Tamil Nadu state. Plant operator Coastal Energen is also involved a corporate resolution insolvency process. Adani Power consumed 19.44mn t of imported coal over 2023-24. This was also more than double the 7.66mn t in 2022-23. Its domestic coal burn in 2023-24 increased by 10pc from a year earlier to 31.72mn t. The outlook for India's thermal power capacity growth is very favourable, the company told investors in July. Peak demand is forecast to grow from 250GW currently to 400GW by 2031-32. This will require an additional 80-90GW thermal power capacity to meet peak demand, even if the 500GW target of non-fossil fuel capacity is achieved, Adani Power said. Indian state governments have already started to call for bids for term supplies to meet power demand 5-6 years from now. Bids for supplies of 6.4GW from thermal power generation have already been invited by three states, while more bids are expected from other states soon, Adani Power said, adding that it is taking proactive steps for expansion because of this positive outlook. By Ajay Modi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian labor board orders rail service to resume
Canadian labor board orders rail service to resume
Houston, 25 August (Argus) — Canada's two Class I railroads avoided a crippling extended work stoppage on Saturday, after an independent labor board upheld the Canadian government's order for the railroads to enter binding arbitration with a labor union representing more than 9,000 rail employees. The Canada Industrial Relations Board (CIRB), in two separate orders, directed the Teamsters Canada Rail Conference (TCRC) to enter binding arbitration with the nation's two Class I railroads — Canadian Pacific Kansas City (CPKC) and Canadian National (CN). The order heads off an extended work stoppage that would have echoed across North American supply chains for virtually all commodities, from crude, refined products, LPG and coal to fertilizers like potash, as well as consumer and industrial goods. Virtually all railed shipments carried by CN and CPKC came to a grinding halt early on 22 August after months-long talks between the railroads and the TCRC hit an impasse. Later the same day, the Canadian government stepped in to force parties into binding arbitration, but the TCRC said it would not abide by the directive without a ruling from the CIRB. In its rulings, the CIRB ordered CN and CPKC employees represented by the TCRC to resume their duties as of 12:01 am EDT on 26 August and remain "until the final binding interest arbitration process is completed". The CIRB also ruled that no further labor stoppages, including lockouts or strikes, could occur during the arbitration process, effectively voiding a TCRC strike notice issued on 23 August for CN workers set to take effect on 26 August. CN and CPKC said they will comply with the CIRB order, and CPKC asked TCRC employees to return to work on 25 August "so that we can get the Canadian economy moving again as quickly as possible and avoid further disruption to supply chains". The TCRC said it would comply with the CIRB decision, even though it sets a "dangerous precedent". TCRC plans to appeal the ruling in federal court. "The ruling signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union," TCRC president Paul Boucher said. "The rights of Canadian workers have been significantly diminished today." It could take weeks for Canadian rail operations to return to normal. CPKC said it could take several weeks for its rail network to fully recover from the work stoppage and even longer for supply chains to stabilize. Canadian railroads last week embargoed shipments of toxic materials and earlier this week stopped loading any new railcars. By Chris Baltimore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
![Generic Hero Banner](/_next/image?url=%2F-%2Fmedia%2Fproject%2Fargusmedia%2Fmainsite%2Fimages%2F14-generic-hero-banners%2Fherobanner_1600x530_generic-c.jpg%3Fh%3D530%26iar%3D0%26w%3D1600%26rev%3D8ec86dce0f724687bd325a9a917cffae%26hash%3D9FD39B08C9D84A160C91A3649C40A186&w=3840&q=75)
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more