China considers easing coal import restrictions

Spanish Market: Coal
21/09/20

China's Guangzhou and Fuzhou ports may be considering clearing some stockpiled imported coal because of tighter domestic supplies and higher prices.

Authorities at Guangzhou and Fuzhou ports in south China's Guangdong and Fujian province respectively are looking at how much stockpiled imported coal is waiting for customs clearance at the ports, according to market participants. The move could signal a possible relaxation of import restrictions, while Guangzhou port could clear 1.5mn t of imported stockpiled coal.

Fuzhou and Guangzhou ports have exhausted their import quotas in early August, meaning only some local utilities could still buy small volumes using limited quotas.

But other market participants are not optimistic about China's acceptance of imported coal. An official at an east China-based power utility said he remains cautious about booking new cargoes, saying customs authorities will stick to a previous target of limiting 2020 imports at a level no higher than last year's receipts of 300mn t.

Expiring 2020 import quotas in most Chinese customs regions have weighed on Chinese coal imports. Total receipts last month, including anthracite, coking coal and thermal coal, reached an intra-year low of 20.66mn t. This marked a fall of 37pc from the same month last year and followed a 21pc year-on-year decline in July.

Market participants expect domestic coal prices could weaken if stockpiled imported coal is cleared. Tight supplies of domestic coal, coupled with an increase in utility restocking ahead of scheduled maintenance on the Daqin railway line, have pushed up domestic coal prices for four consecutive weeks. The price of NAR 5,500 kcal/kg coal increased from $79.88/t fob Qinhuangdao on 14 August to $86.49/t on 18 September, according to Argus assessments.

Asia-Pacific coal prices have also been supported by an increase in Chinese buying interest with expectations that the 2021 quota system will take effect in January. Argus assessed prices of NAR 3,800 kcal/kg Indonesian coal at $23.61/t on 18 September, up by $1.21/t on the previous week, while prices of NAR 5,500 kcal/kg Australian coal rose to $39.79/t fob Newcastle on 18 September from $35.04/t fob on 4 September.

Customs authorities allocated some additional quotas to utilities in the northeast China provinces of Heilongjiang, Liaoning and Jilin late last month to cope with tighter domestic coal supplies ahead of the winter restocking that typically begins in October. This has boosted demand for Russian coal because of its proximity to the provinces.

Chinese thermal and coking coal imports mn t

Domestic vs imported Chinese coal prices $/t

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05/11/24

Port of Vancouver grinds to halt as picket lines form

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US railroad-labor contract talks heat up

04/11/24

US railroad-labor contract talks heat up

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Japan’s election leaves energy policy in limbo

28/10/24

Japan’s election leaves energy policy in limbo

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UK ramps up climate action under new leadership

28/10/24

UK ramps up climate action under new leadership

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US data center growth effect on coal may be limited

24/10/24

US data center growth effect on coal may be limited

New York, 24 October (Argus) — The US coal industry is pondering ways to respond to the projected boost in domestic power demand linked to planned data centers in the pipeline, but the centers' effect on coal could be mixed or limited. A number of projects have been announced for coming years. But generators are still grappling with uncertain estimates of which major projects in the US will come to fruition, where they will be located and other criteria that will drive demand. "Data center companies are shopping around in different utilities' territories and showing up multiple times and being double counted", said Laurie Williams, director of the Sierra Club's Beyond Coal Campaign. According to the National Telecommunications and Information Administration, there are more than 5,000 data centers currently in the US, and demand for data centers in the country is projected to grow by 9pc annually through 2030. 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Other developers have indicated wanting to buy generation from wholesale electricity markets. In addition, US utilities continue to retire coal units to comply with US Environmental Protection Agency (EPA) rules. The amount of coal-fired generating capacity available in the US is expected to shrink to 163.7GW by the end of 2025 from 177GW in 2023, according to EIA. Longer life for coal plants? But some in the electric power industry are concerned about enough generating capacity being available to meet expected load growth because, in some cases, new generating facilities need to be built to provide the amount of power needed. "With the level of demand increasing, all energy resource consumption will increase," Utah Office of Energy Development acting director Dusty Monks said. "It is not out of the realm of possibility to say these industries (data centers and AI) will surpass the energy use of traditional customers in the next 10-15 years". Some generators that project increased electricity demand driven by data centers have proposed extending the operation of their coal plants. Limited natural gas pipeline infrastructure in some regions and mine-mouth power plants also support increased coal consumption to some extent. Alliant Energy delayed the coal-to-gas conversion of a Wisconsin plant by three years to 2028. Duke Energy may put off some coal-fired power plant unit retirements in Indiana, with the intention of burning coal in the state until 2038 . Elsewhere in the US, companies representing up to 15GW of load — mostly data centers — are seeking service from American Electric Power by 2030. Other utilities are continuing to convert coal-fired facilities to natural gas instead of retiring them. While the EPA has rolled out rules for gas plant emissions, gas units may still be more competitive financially and technologically over coal since gas prices have been lower and new gas units generally are more efficient when used as a backup to intermittent renewable energy. Even power plants in Utah, which traditionally favored coal, generated nearly the same amount of power from gas and coal over the first seven months of 2024 ( see chart ). US coal producers are paying close attention to plans for data centers and possible effects on coal demand but are still scaling back output. US coal mines' output totaled 591.5mn st (536.6mn metric tonnes) this year through 12 October, down by nearly 13pc from the same period in 2023, according to EIA data. Some of the states with the greatest growth in commercial electricity demand still have relatively large amounts of coal-fired generation , the EIA data show. But many of these states are also natural gas generation hubs. This includes Virginia and Texas, which had an outsized share of commercial generation growth last year. The fate and plans of data center projects in the pipeline as well as economics, regulation and company preference will determine the outcome for coal generation. By Elena Vasilyeva Generation in selected states, January-July 2023-24 MWh Coal-fired generation Gas-fired generation Renewables Total States 2024 2023 2024 2023 2024 2023 2024 2023 Arizona 5,593,283 6,228,907 28,916,433 27,939,458 10,905,903 9,452,570 64,588,784 62,083,941 % of total 8.7% 10% 44.8% 45.0% 16.9% 15.2% Georgia 10,887,241 8,828,638 34,824,577 35,144,586 7,318,882 6,552,342 83,496,202 73,139,216 % of total 13% 12.1% 42% 48.1% 8.8% 9.0% North Dakota 13,382,059 12,873,017 1,242,138 1,267,175 9,657,014 9,606,927 24,336,701 23,816,246 % of total 55% 54.1% 5.1% 5.3% 39.7% 40.3% Ohio 17,756,489 16,619,607 48,526,513 44,227,623 4,370,982 2,709,434 81,756,362 73,249,449 % of total 22% 22.7% 59% 60.4% 5.3% 3.7% Oklahoma 3,142,129 2,855,139 27,714,093 25,662,258 25,081,028 23,054,481 56,121,790 51,712,526 % of total 5.6% 5.5% 49% 49.6% 44.7% 44.6% South Carolina 9,885,901 8,792,049 12,670,286 13,811,018 3,254,362 3,198,205 59,528,878 58,292,079 % of total 16.6% 15.1% 21.3% 23.7% 5.5% 5.5% Texas 34,791,194 39,405,356 160,458,170 154,904,393 99,240,556 90,277,178 319,162,821 310,039,675 % of total 10.9% 12.7% 50% 50.0% 31.1% 29.1% Utah 6,954,233 8,802,671 6,720,481 6,762,046 3,452,974 3,331,940 18,090,480 19,499,948 % of total 38.4% 45.1% 37% 34.7% 19.1% 17.1% Virginia 1,190,771 990,257 35,852,015 28,696,547 4,885,261 4,143,970 59,761,590 52,708,332 % of total 2.0% 1.9% 60% 54.4% 8.2% 7.9% Wyoming 13,486,437 16,573,741 2,756,775 1,141,796 6,258,359 5,759,272 22,786,928 23,743,769 % of total 59.2% 69.8% 12% 5% 27.5% 24.3% — EIA Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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