Indonesian coal market makes slow start to the week
The Indonesian physical coal market made a typically slow start to the week, even as enquiries began to increase since the end of last week as some market participants see the market may be finding a floor.
Enquiries from Chinese buyers for prompter cargoes began to surface towards the end of last week as they expect stricter import curbs from October. Indian buyers also started to express interest for cargoes arriving after the June-September monsoon season.
Bid and offer levels in the fob GAR 4,200 kcal/kg market were mostly unchanged today from the end of last week. September-loading geared supramax cargoes were bid in a $30.50-31/t range, while offers were also steady at around $31-31.50/t. Argus assessed the GAR 4,200 kcal/kg coal price at $31.01/t on 23 August.
The ICI 4 derivatives market made a slow start to the week, with first-quarter 2020 contracts offered today at $34.25/t and no matching bids. The last Argus assessed price for first-quarter 2020 ICI 4 futures on 23 August was at $34/t.
Trading activity in the ICI 4 derivatives market was also sluggish last week, with just a 10,000t clip for October clearing at $31.25/t on the CME. Last week's trade took the total ICI 4 derivatives cleared the CME so far this month to 139,000t.
The Australian fob Newcastle market saw an index relevant trade done today at $60.50/t fob for an October-loading 75,000t cargo of NAR 6,000 kcal/kg coal. The level of the trade, which was done on screen, was down from the most recent assessment of $61.72/t fob Newcastle on 23 August.
A 25,000t clip of the same material traded at $65/t fob Newcastle for November loading, also on screen, but this did not fit the Argus index.
Buyers and sellers' expectations in the NAR 5,500 kcal/kg market appeared mismatched as Chinese buyers were seeking September-loading cargoes, while sellers were already looking to offload their October supplies. Buyers' interest for September was in line with last week when a September-loading Panamax was bid at $49/t fob Newcastle.
China's futures market had the September contract on the Zhengzhou commodities exchange close at 586.20 yuan/t today, up by Yn0.40/t from 23 August.
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Eastern US ports, railroads prepare for possible strike
Eastern US ports, railroads prepare for possible strike
Cheyenne, 26 September (Argus) — Ports in the eastern half of the US and railroads CSX and Norfolk Southern are starting to act on contingency plans as the deadline for a potential port worker labor strike nears. Port authorities in New York, New Jersey, Virginia, New Orleans, Louisiana, and Houston, Texas, have told customers at least some operations will stop effective 30 September if the International Longshoremen's Association (ILA) and US Maritime Alliance (USMX) cannot come to a new collective bargaining agreement. Union members have threatened to walk off the job as soon as 1 October, potentially bringing container cargo traffic to a halt in many regions. Other port authorities have been more circumspect on plans. The Maryland Port Authority, which oversees the Port of Baltimore, has said so far that it is "closely monitoring" the situation and that a strike "could impact" some operations. At the moment, ILA and USMX do not appear to be close to an agreement on a master labor contract. USMX today filed an unfair labor practice charge against ILA with the National Labor Relations Board, accusing the union of "repeated refusal" to negotiate. The union earlier this week said the two sides have talked "multiple times" and blamed the impasse on USMX continually offering "an unacceptable wage increase package." Container cargoes at greatest risk The potential port strike is expected to have the greatest impact on products carried on container ships. Movements of dry bulk cargo, such as coal and grains, are expected to be less affected by a potential work stoppage, though there could be side effects from the congestion of other products being rerouted to ports not affected by the strike. Some ports that have announced contingency plans expect to stop work on 30 September in stages. The Port of Virginia — including Norfolk International Terminals, Virginia International Gateway and Newport News Marine Terminal — would stop train deliveries at 8am ET on 30 September and require all vessels at the port to leave by 1pm. Container operations at Norfolk International Terminals and Virginia International Gateway would stop by 6pm ET that day, the port said. The New Orleans Terminal at the Port of New Orleans would stop receiving refrigerated exports at 5pm ET on 27 September and halt container vessel operations at 1pm ET on 30 September. It would also halt rail operations at 5pm ET on 30 September. Eastern railroads CSX and Norfolk Southern (NS) already have started curtailing some operations. CSX required temperature-controlled refrigerated equipment headed to East coast ports to be at CSX loadouts by 25 September and set deadlines for other export intermodal shipments to be at CSX loadouts by 25 September-5 October. NS required some eastern export shipments be at the railroad's loadout locations between 23-25 September and wants most of the rest of the container exports to be at its facilities by 5pm on 29 September. "We are proactively implementing measures to minimize potential operational impacts across our network, including at our Intermodal facilities," NS said on 23 September. The railroad also "strongly" recommended that customers not ship hazardous, high-value and refrigerated products by rail to export terminals "to avoid unexpected delays upon reaching the port destinations." By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vietnam’s Vinacomin to boost coal imports
Vietnam’s Vinacomin to boost coal imports
Singapore, 25 September (Argus) — Vietnamese coal producer Vietnam National Coal and Mineral Industries (Vinacomin) plans to more than double its thermal coal imports over the next six years to meet an anticipated growth in demand. The state-owned company, which meets most of Vietnam's coal requirements, aims to lift imports to 12.6mn t this year and to 14.5mn t in 2025, and increase its receipts of seaborne thermal coal to 22mn t in 2030, a senior official from the firm told Argus on 25 September. It imported 9.2mn t of coal in 2023. The move to raise imports comes as Vinacomin wants to raise its blended coal supplies to utilities, because it is the key supplier to local coal-fired power plants. Vinacomin typically blends its domestic coal with imported thermal coal to meet utility requirements as anthracite accounts for most of the locally produced coal, and is not preferred by plants for direct use given its low volatile matter content. Vinacomin is also a key supplier of coal to industries such as steel and cement. The coal import plans support Vietnam's overall coal import outlook at a time when the country's seaborne coal receipts are set to reach an all-time high in 2024. Vietnam has imported 45.86mn t of all types of coal in the first eight months of the year, up by about 33pc from a year earlier, according to its customs data . The country could end up importing close to 69mn t of coal this year at the current average rate of 5.73mn t/month, according to Argus calculations, marking Vietnam's highest annual imports since the 55mn t of coal it received in 2020. The imports could reach about 73mn t by 2030 and rise further to peak at around 85mn t in 2035 , according to the government's latest national energy master plan released last year. Vinacomin's strategy to grow imports also comes as Vietnam's domestic coal output has remained rangebound and sluggish. Vinacomin has set a target to produce 37.4mn t this year, up from 36.8mn t it produced last year. Domestic coal output growth faces challenges as there is no near-term plan to explore the Red River delta, which accounts for nearly 86pc of Vietnam's total coal reserves of 48.9bn t. Coal mining in the belt could be ecologically sensitive as the bulk of the land is used for agriculture, while coal projects in the region could also be economically unviable. Vinacomin in 2024 is seeking imported coal with calorific value of NAR 4,800-5800 kcal/kg coal of low and mid-volatile matter coal, with typical sulphur content of 0.6pc to aid its blending efforts, the official said. Vinacomin buys the bulk of the coal via tenders and it refers to international coal indices including Argus' ICI index for Indonesian coal as well as the API index for non-Indonesian coal. By Saurabh Chaturvedi Vinacomin's thermal coal import plan (mn t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Draught limits tighten on lower Mississippi River
Draught limits tighten on lower Mississippi River
Houston, 23 September (Argus) — The US Coast Guard (USGC) placed further restrictions on traffic on the lower Mississippi River as water levels continue to deteriorate. The USCG on 22 September announced that all northbound traffic cannot have draught deeper than 9.5ft from Tunica, Louisiana, to Greenville, Mississippi. For Greenville to Tiptonville, Mississippi, barges must remain above a 9ft draught, the shallowest draught channel allowed for the lower Mississippi River by the US Army Corps of Engineers. All northbound transit also cannot load more than four barges wide or configure more than five barges wide. Southbound traffic from Tiptonville to Greenville cannot be more than six barges wide or deeper than 9.5ft. Greenville to Tunica southbound barges can load as deep as 10ft but cannot be more than seven barges wide. All locations between Cairo, Illinois, and Greenville fell back to their low water threshold over the weekend as rainfall from Hurricane Francine flowed down the river. More grain has moved downriver this year compared with last year as the US Department of Agriculture (USDA) expects higher US grain exports in the 2024-25 marketing year. Around 367,000 short tons of grain moved for the week ended 14 September, which is about double the same period a year earlier, the USDA said. Both south and northbound movement is expected to see a heavier pace in October. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan pushes abatement approach to energy transition
Japan pushes abatement approach to energy transition
Tokyo, 23 September (Argus) — Japan is keen to promote its energy transition approach, focused on carbon abatement technologies, to the wider coal-reliant Asia-Pacific region. The country has accelerated development of carbon abatement technologies to keep fossil fuels in its energy mix and boost energy security and economic growth. Japan, with its G7 counterparts, pledged to phase out "unabated" coal-fired plants by 2035, or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways". This is a major step for Japan, a resource-poor country. But legislative progress aimed at developing value chains for carbon capture and storage (CCS) and cleaner fuels, such as hydrogen and ammonia, might have encouraged Tokyo to commit, especially since the G7 text allows for some wiggle room. To ensure continued use of its abated thermal power plants, trade and industry ministry has requested ¥11.2bn ($79mn) to support CCS projects, including exploration of CO2 storage sites, for 2025-26, up sharply from the ¥1.2bn budgeted for 2024-25. Japan has yet to set a date to achieve the phase-out target. But it had already promised not to build new unabated coal-fired plants at last year's UN Cop 28 climate talks, while pledging to phase out "inefficient" coal-fired plants by 2030. Less than 5pc of Japan's operational coal fleet has a planned retirement year, according to analysis by Global Energy Monitor, and these might comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima-Daiichi nuclear disaster, is unlikely to receive a retirement date without a countrywide policy that calls for a coal exit. Japan's coal demand could decline, to some extent, under global divestment pressure. But the fuel remains key, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence. Continental divide The country is keen to extend its vision for "various" and "practical" pathways, including abatement technologies, to coal-reliant southeast Asia. This stems from Tokyo's sceptical view about promoting a more European approach to the energy transition — driven by wind and solar power — to Asian countries. Japan stresses the importance of more diversified pathways, including thermal power with abatement. The country aims to spur decarbonisation in Asia-Pacific through a platform called the Asia Zero Emission Community (Azec) initiated in 2022. Asia-Pacific accounts for more than half of global greenhouse gas (GHG) emissions, at 17.178bn t of CO2 equivalent, according to the IEA. In Jakarta last month, 11 Azec countries emphasised the need to co-operate "to decarbonise coal power generation". The platform sets out options such as biogas, hydrogen and ammonia, and retrofitting with CCS and carbon capture, utilisation and storage. Japan's industries have already committed to carbon abatement at coal-fired plants in Asia, leveraging their technological know-how. Tokyo has pledged to provide about $70bn to support decarbonisation globally. This funding is part of wider financial assistance to help mobilise the estimated $28 trillion that Asia requires. To secure the funding, Japan has already issued part of a $139bn climate transition bond and aims to strengthen the financial support through the Asia Zero Emission Centre, the latest Azec initiative, under which transitional finance will be studied further, a trade and industry ministry official told Argus . Japan is on track to reduce its GHG emissions by 46pc by the April 2030-March 2031 fiscal year from its 2013-14 level, and hit its net zero emissions goal by 2050. By Motoko Hasegawa and Yusuke Maekawa Japan CO2 emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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