Easing Chinese coronavirus curbs to lift power demand
Several Chinese provinces have lowered their coronavirus emergency levels, likely paving the way for an increase in business and industrial activity that could lift power consumption and coal demand.
Zhejiang province in eastern China has lowered its epidemic emergency to level three, the lowest level, after it recorded no new coronavirus cases during the past 30 days and said all infected patients had been discharged from hospitals. Industrial activity will be allowed to return to normal as a result, although measures will be put in place to avoid transmission from other countries.
The move is likely to raise power demand and support coal use. Coal consumption at utility Zhejiang Energy reached 108,000 t/d yesterday, according to coal industry association the CCTD, the highest since 12 January.
Zhejiang is the fourth-biggest Chinese province in terms of GDP and is a major thermal power generator.
Shanghai municipality in eastern China yesterday reduced its coronavirus emergency level from level one to level two, easing restrictions on travel and quarantines. This could allow more local businesses and factories to reopen and potentially raise power consumption.
The lockdown in Wuhan city, where the coronavirus first emerged, will be lifted on 8 April. The city has been locked down since 23 January. Other cities in Hubei province have started lifting restrictions on the movement of people, although Beijing and Tianjin municipalities and Hubei and Hebei provinces are keeping their coronavirus emergency alerts at the highest levels.
The easing of emergency levels could allow more employees to return to work in other cities, boosting industrial power use. Coal consumption has been increasing along with the gradual reopening of factories, although rising temperatures have curbed any significant increase in coal consumption during the past two weeks.
Coal burn at major power plants in China's coastal regions reached 574,000 t/d yesterday, the CCTD said. This was the highest since 19 January.
But the recent increase in coal consumption has done little to support domestic coal prices. Bids for NAR 5,500 kcal/kg coal are currently around 541-545 yuan/t fob north China ports, with offers at around Yn546-548/t. Argus last assessed this market at Yn549.50/t ($77.61/t) fob Qinhuangdao on 20 March.
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South Africa adopts climate change law
South Africa adopts climate change law
Cape Town, 25 July (Argus) — South Africa's president Cyril Ramaphosa has signed into law the country's climate change bill, which sets out a national response to climate change for the first time. The new climate change act will enable the orderly reduction of greenhouse gas (GHG) emissions through the implementation of sectoral emission targets towards South Africa's commitment to reach net zero by 2050. Currently, the country is the 15th largest GHG emitter in the world, according to the World Resources Institute. The law provides policy guidelines to ensure South Africa reaches its nationally determined contribution (NDC) under the Paris climate agreement by assigning individual enterprises carbon budgets and facilitating public disclosure of their progress. In its updated 2021 NDC, the country has undertaken to cut its GHG emissions to 350mn-420mn t of CO2 equivalent (CO2e), equivalent to 19-32pc below 2010 levels, by 2030. The lower end of this range is in line with the Paris Agreement's 1.5°C global warming threshold. To meet this, South Africa will have to achieve a steep decline in coal-fired electricity generation. A carbon tax is seen as a vital component of the country's mitigation strategy, according to the president. "By internalising the cost of carbon emissions, carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies, and also generates revenue for climate initiatives," Ramaphosa said. South Africa's carbon tax was introduced in a phased approach in June 2019 at a rate of 120 rands/t ($7/t) of CO2 equivalent (CO2e) and increased to R134/t of CO2e by the end of 2022. But tax-free allowances for energy-intensive sectors such as mining, and iron and steel, along with state-owned utility Eskom's exemption, implied an initial effective carbon tax rate as low as R6-48/t of CO2e. South Africa's National Treasury is targeting an increase to $30/t of CO2e by 2030. But the extension of phase one from the end of 2022 to the end of 2025, together with an uncertain future price trajectory and lack of clarity on future exemptions, means the effective carbon tax rate is likely to remain well below the IMF's recommended $50/t of CO2e by 2030 for emerging markets. The new climate change act seeks to align South Africa's climate change policies and strengthen co-ordination between different departments to ensure the country's transition to a low-carbon and climate-resilient economy is not constrained by any policy contradictions. It outlines South Africa's planned mitigation and adaptation actions aimed at cutting GHG emissions over time, while reducing the risk of job losses and promoting new employment opportunities in the emerging green economy. The law also places a legal obligation on provinces and municipalities to ensure climate change risks and associated vulnerabilities are acted upon, while providing mechanisms for national government to offer additional financial support for these efforts. The new act formally establishes the Presidential Climate Commission (PCC) as a statutory body tasked with providing advice on the country's climate change response. Among other things, the PCC is developing proposals for a just transition financing mechanism, for which a platform will be launched in the next few months. Over the last three years, South Africa has seen an increase in extreme weather events often with disastrous consequences for poor communities and vulnerable groups. To address the substantial gap between available disaster funds and the cost of disaster response, the government announced in February that it would establish a climate change response fund. At the time of the announcement, Ramaphosa reiterated that South Africa would undertake its just energy transition "at a pace, scale and cost that our country can afford and in a manner that ensures energy security". Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-Australia’s Coronado to lift coal sales
US-Australia’s Coronado to lift coal sales
Sydney, 25 July (Argus) — US-Australian coal producer Coronado Coal will boost coal sales during July-December despite logistical challenges, as it maintains its output guidance of 16.4mn-17.2mn t for 2024. The firm sold 7.8mn t of coal during January-June, leaving it a target of 8.6mn t for July-December to meet the bottom of its 2024 guidance . It has maintained this guidance despite warning that shipments from its Australian Curragh mine will be affected by a two-week rail disruption from the end of July . Coronado operates the Curragh mine in Queensland and two mining complexes in the US' Virginia. All produce coking and thermal coal. Coronado's revenues were supported during April-June compared with January-March by a smaller discount for pulverised injection coal (PCI) against hard coking coal prices, which saw the PCI price rise while other metallurgical coal prices were under pressure. Its sales prices will remain strong in July-September, forecasts chief executive Douglas Thompson, on restocking in India and the rail disruption in Queensland, as well as the fire at Anglo American's Grosvenor mine that will disrupt Australian exports. Thompson warned that there was some downside risk of $5-10/t to Australian PCI pricing but if this was realised it will see China restart buying from Australia. In the long term he expects more competition from Russia-origin PCI, as Russian coal producers find new routes to the seaborne market and regain market share lost because of an European embargo. The premium for premium hard coal prices over PCI coal prices has shrunk to around $30/t from $145/t over the past six months. Argus last assessed the premium hard low-volatile price at $224/t fob Australia on 24 July and the PCI low-volatile price at $193.65/t. Coronado's group sales volumes were up 8.3pc to 4.1mn t in April-June compared with January-March , reflecting higher sales from its Australian and US operations. The increase in volumes combined with reduced need to remove waste materials allowed Coronado to cut is mining costs by 27.5pc from the previous quarter to an average of $91.10/t of coal sold. The firm expects costs to fall further in July-December as it demobilises more of its mining fleet at its Curragh mine. This reflects reduced waste removal and should have no impact of coal production at Curragh, Thompson said. Production at Curragh should increase in the second half of 2024, with 100,000t of coal production deferred from June to July because of heavy rainfall. By Jo Clarke Coronado Coal (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Jan-Jun '24 Jan-Jun '23 Sales (mn t) Australia (Curragh) 2.7 2.5 2.5 5.2 4.7 US 1.4 1.2 1.5 2.6 3.0 Total 4.1 3.7 4.0 7.8 7.6 Sales data % coking coal of total sales 81.0 78.7 76.0 79.9 75.3 Australian realised met coal price (fob) ($/t) 216.2 225.2 237.7 220.5 239.7 US realised met coal price (for) ($/t) 161.7 170.9 196.0 166.0 215.5 Source: Coronado Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Refining, LNG segments take Total’s profit lower in 2Q
Refining, LNG segments take Total’s profit lower in 2Q
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Australia’s Origin to expand Eraring battery project
Australia’s Origin to expand Eraring battery project
Sydney, 25 July (Argus) — Australian utility Origin will expand the battery energy storage system (BESS) at the site of its 2,880MW Eraring coal-fired power station in News South Wales (NSW), as part of its strategy to pivot to renewable energy. The A$450mn ($294mn) investment will add 240MW of four-hour duration supply to the 460MW, two-hour BESS already under construction as part of the project's first stage, Origin said on 25 July. Agreements for equipment supply and construction have been made with stage two construction to begin in early 2025 before the expansion comes on line during January-March 2027. Equipment will be provided by Finnish engineering firm Wartsila, which is also building the first stage of the BESS. The sanctioning of Eraring's second stage brings the firm's total commitment on storage to 1.5GW, with Origin agreeing in January to outlay A$400mn on a 300MW BESS along with the firm's 550MW Mortlake gas-fired power plant in Victoria. Origin and the NSW Labor state government agreed in May to keep Eraring, Australia's largest single power plant, open for at least two more years as part of a deal to maintain capacity because of delays with replacement projects. Australia is struggling to replace its retiring coal-fired power generation because of cost blowouts and delays for renewable projects. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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