Stuck Baltimore coal may raise prices in India, Europe
The blocking of two coal terminals in the key Baltimore US coal export hub this morning following a bridge collapse will mostly hinder North Appalachian coal exports to India for the brick kiln industry.
Most thermal coal exports from Baltimore's two coal terminals, Consol Marine Terminal (CNX) and Curtis Bay Piers, flow to India, with 12.4mn t shipped last year and 6.3mn t in 2022, US customs data show. Baltimore exported just over 900,000t to India in January, up from 364,000t a year earlier.
The port did not provide a timeline as to when the terminals may resume coal exports as of 26 March.
Suspended North Appalachian shipments will probably raise prices in India, as brick kilns enter the peak production season in the summer, an India-based trader said. The brick kiln industry typically consumes very-high calorific value NAR 6,900 kcal/kg North Appalachian coal.
Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value.
US petroleum coke is currently more competitive than coal for Indian buyers, based on Argus spot price assessments. The price of cfr India 6.5pc sulphur coke averaged $3.74/mn Btu over 4-25 March, compared with $4.16/mn Btu for high-sulphur Illinois basin coal, the next cheapest alternative. North Appalachian coal averaged $4.86/mn Btu over the same period, down from $5.02/mn Btu in January.
Some US coal is sold to India under term contracts on an API 2 index-linked price basis.
Europe
The Netherlands, Germany and Belgium are the second-largest market for North Appalachian coal, with close to 310,000t sent there from Baltimore terminals in January, up from just above 200,000t a year earlier.
April API 2 futures rose sharply this morning to $115/t but had eased slightly to $114.50/t by noon. The incident has added a "level of volatility [which] could have big implications", a European paper broker said.
In the physical market, an April-arrival 50,000t multi-origin cargo was bid at $125/t des Amsterdam-Rotterdam today, flat on yesterday.
But most US material does not trade on these terms because of varying calorific value, sulphur and chlorine levels. Only around 50,000 t/month of US Scota coal is available, a European physical broker said, but this may be exported from Gulf coast ports, a different broker said.
Scota — the standard coal trading agreement — is a set of terms and specifications used to trade NAR 6,000 kcal/kg coal in Europe.
Some US North Appalachian cargoes were blended with metallurgical coal a year ago to reduce the calorific value and meet Scota contract specifications, but the high free-swelling index (FSI) content caused problems for power plants because this made it harder to burn as some particles do not ignite, creating more ash.
Logistics
North Appalachian coal producers could rail volumes around 250km south to the Hampton Roads port complex in Virginia, but this would add to railing costs. Hampton Roads typically handles Central Appalachian coal.
Some North Appalachian coal is barged south to New Orleans when the eastern terminals at Baltimore and Hampton Roads become congested, according to a barge operator.
The CNX Marine Terminal can store up to 1mn t and exported 19mn t of metallurgical and high calorific-value thermal coal last year, according to its full-year 2023 results.
The 79,000t Klara Oldendorff is currently loading thermal coal at CNX Marine Terminal and the 79,000t Jy River is loading coal at Curtis Bay Piers.
Some 22 ships are currently inside the port, of which 13 are expected to load coal.
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.
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