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Pulse of Charcoal - March 16
Coal industry - actual figures and facts. Partner project of the Modern Analytical Agency (CAA) and the EastRussia portal
Mining, logistics, prices, export - all that the coal industry in Russia and in the world lives on is concise and to the point - in a new partner project of the Modern Analytical Agency (CAA) and the EastRussia portal
A brief overview of the global coal market
Despite falling temperatures in the EU and an increase in natural gas prices to 18.1 euros / MWh (+1.8 euros / MWh or + 11% as of 03.03.2021), steam coal indices in Europe last week slightly decreased to 66-66.5 dollars / t. The price of the material was under pressure from a sharp rise in the cost of European CO2 quotas to 40.37 € / t. (+2.96 EUR / t. To 03.03.2021), caused by speculation in the market against the background of increased demand for quotas. In addition, the increase in wind generation in some European countries to 1585 GWh (+907 GWh or + 161% by 03.03.2021) reduced the share of coal generation in the energy balance. Coal reserves at ARA terminals fell to an almost 5-year low of 3.8 million tons (-0.1 million tons or -2% by 03.03.2021).
On March 10.03.2021, 2050, the European Parliament overwhelmingly approved the introduction of a carbon border levy to increase the competitiveness of the products of European enterprises in comparison with cheaper imported counterparts imported into the EU from countries without climate restrictions. The draft law, which is not yet binding, is viewed as the implementation of the Green deal, an agreement between European countries, according to which the bloc seeks to achieve carbon neutrality by XNUMX.
Cement producers in India are stepping up their coal purchases ahead of the monsoon season, keeping the price of the high-calorie South African material in the $ 92-93 / t range this week. Coal reserves at Richards Bay terminals decreased to 3.3 million tons (-0.2 million tons by 03.03.2021).
Due to a short-term decline in Indian demand, coal exports through Richards Bay terminals in February 2021 decreased to 4.7 million tons (-0.8 million tons, or -15% to 03.03.2021). At the same time, coal supplies from South Africa to Pakistan increased to 1.2 million tons in February (+0.4 million tons or + 45% versus February 2020).
South African coal producer African Rainbow Minerals Coal (ARM Coal) incurred a loss of $ 14.3 million in 6 months of restrictions related to the Covid-19 pandemic in the country. Lower demand from major South African power generation company Eskom has negatively impacted ARM Coal's earnings. ARM Coal is a joint venture between African Rainbow Minerals and Glencore that has interests in a number of large coal energy projects in South Africa.
Australian thermal coal quotes are in a sideways trend in the range of $ 92-93 / t. due to the slowdown in the trading activity of the Chinese market participants. Chinese companies maintain a wait-and-see attitude against the backdrop of the main political conference in the country (04-11.03.2021).
The Conference of the People's Political Consultative Council of the PRC and the Standing Committee of the National People's Congress is an event during which key political and economic issues in China are discussed. In 2021, the main item on the agenda of the Conference was the discussion of the 14th five-year economic development plan, according to which the annual volume of coal production in China should not exceed 4.1 billion tons by the end of 2025. By 2060, the PRC plans to achieve carbon neutrality ...
A wait-and-see attitude and low demand of Chinese companies for Indonesian coal against the background of the main political conference in the PRC lowered the quotes of the material of Indonesian origin to $ 72-73 per ton.
Weak demand of metallurgical plants in the Asia-Pacific region for coking material due to low steel prices weakened the indices of imported metallurgical coal from Australia.
The Japanese company Nippon Steel reached an agreement with an Australian mining company on a semi-soft coking coal price in the first quarter of 2021 (Q1'2021) at $ 92 / t. FOB (+5.5 USD / t. To the indicator of the fourth quarter of 2020).
Australian coal producer Foxleigh has agreed with the Japanese steel company Nippon Steel and the South Korean company POSCO on the price of PCI coal in the first quarter of 2021 (Q1'2021) at $ 101 / t. FOB (+4 USD / ton to the indicator of the fourth quarter of 2020).
A-Property will transfer 5% of the Elga coal project to Rostec
State Corporation Rostec signed an agreement with A-Property, owned by Albert Avdolyan, on the basic conditions for transferring 5% of the Elga coal project to the state corporation. Rostec already owns 25% in the Port Vera coal terminal and the Ogodzhinsky coal deposit.
On February 26, 2021, Dmitry Novikov (President of Rosengineering) and Ekaterina Lapshina (Albert Avdolyan's asset manager) transferred to Rostec their stakes in the Ogodzhinskoye coal field and the Port Vera coal terminal (see CAA Russian Coal Weekly, February 26, 2021). Presumably, the collateral is associated with the provision of financing by Rostec for the purchase of shares in assets from Dmitry Bosov's structures.
Albert Avdolyan intends to create an industrial cluster in the Russian Far East. This cluster should include the Yakutsk Fuel and Energy Company (Avdolyan bought the company in September 2019), the Elginsky coal project, as well as the Port Vera terminal and the Ogodzhinsky coal deposit.
The Ogodzhinskoye coal deposit is located in the Amur Region, not far from the northern border with China and about 2 thousand km from the ports of the Far East. Proved coal reserves are 82.7 million tons, probable - 662 million tons. The design capacity of the deposit is 30 million tons of coal per year.
Port Vera is a new coal terminal located in the Russian Far East. Last year, the terminal handled 2.6 million tons of coal. The terminal will reach its design capacity of 20 million tons by 2022.
In 2020, the production of Elgaugol, a company engaged in the development of coal deposits within A-Property, amounted to 12 million tons. By 2023, the company plans to increase production to 45 million tons. At the Ogodzhinskoye coal deposit, Elgaugol plans to increase coal production from 2023 million tons to 1 million tons.
Rostec is a Russian state-owned corporation created to facilitate the development, production and export of high-tech products and controls assets in various industrial sectors.
SUEK to launch a new coal mine in 2021
According to the Deputy Governor of the Kemerovo Region, Andrey Panov, SUEK-Kuzbass plans to commission the November 7-Novaya coal mine in 2021 in Kuzbass.
Investments in the construction of the mine are 15 billion rubles. ($ 203.5 million). The design capacity of the enterprise will be 4.8 million tons of coal per year.
SUEK-Kuzbass is a Russian coal producer, part of SUEK. The SUEK Group, owned by Russian businessman Andrey Melnichenko, includes 30 coal mining enterprises,
7 processing plants, the Daltransugol coal terminal in the port of Vanino, the Murmansk commercial seaport, the Siberian generating company and other mining, generating and logistics assets. In 2020, SUEK's production amounted to 101.2 million tons (-4.9 million tons, or -4.7% by 2019).
Russian Railways will build a new railway to China
On March 02, 2021, during a meeting on the development of the coal industry in Russia, Russian Railways proposed to start expanding the Tynda-Komsomolsk-Vanino section of the Baikal-Amur Mainline (BAM). The expansion project includes the construction of a 1000-kilometer railroad, a bridge on the Amgu River and a new tunnel in the Kuznetsovsky District. The total cost of the project is estimated at $ 9.6 billion. The new railway is designed to ensure the growth of Russian coal exports to China. Russian President Vladimir Putin approved the project and spoke in favor of the National Welfare Fund (National Welfare Fund) to finance the initiative of Russian Railways.
In 2020, the total coal production in Russia amounted to 401.6 million tons (-41.1 million tons, or -9.3% by 2019). The total export volume reached 195.4 million tons (+2 million tons or + 1% by 2019), of which 122 million tons were in the Asia-Pacific region. China imported 39.6 million tons of Russian coal (+7.4 million tons or + 23% by 2019). According to Vladimir Putin, the Asia-Pacific market is a priority compared to other export destinations, since Asia has a high demand for coal of Russian origin. In contrast, the EU's coal phase-out policy and increased generation from renewable energy sources are helping to reduce the consumption of Russian coal in the European market.