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Pulse of Coal - November 20

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

Pulse of Coal - November 20
Special project Coal of the East of Russia

A brief overview of the global coal market

Last week, thermal coal indices in Europe showed positive dynamics above $ 140 / t. against the background of the suspension of certification of Nord Stream 2 by the German Federal Grid Agency, while the quotes of the Russian coal FOB Ust-Luga 6000 amounted to 165 USD / t.

Due to ongoing problems with the railway line connecting the coal-mining provinces of South Africa and the port of Richards Bay, the key importing countries of South African material, India and Pakistan, have taken a wait-and-see attitude with prices appreciating above $ 135 / t. Coal reserves at Richards Bay terminals remain at less than 3 million tonnes, which could cause disruptions in the export of material. South African rail operator Transnet announced that more than 2021 km of copper cable had been stolen from January to October 1 for the rail line. Over the past year, 1190 trains were canceled as a result of security incidents, according to the company.

In China, spot prices for coal of 5500 kcal / kg NAR were in the range of USD 165-170 / t. FOB Qinhuangdao. China has significantly increased its coal production to record levels, but despite this, the Chinese authorities are again calling on coal companies to increase production.

NEWC index of high-calorific Australian coal at 6000 kcal / kg dropped to $ 150 / t, which was caused by the new pricing policy of the Chinese government amid anti-coal protests in Australia, which interrupted rail transport to Newcastle port.

The decrease in trading activity of Chinese consumers as a result of the increase in coal production in the PRC negatively affected the indices of the Indonesian material 5900 kcal / kg GAR, which fell below $ 145 / t.

Weak demand of metallurgical plants in the APR for coking material weakened the indices of imported metallurgical coal from Australia below $ 370 / t.


Results of the COP26 conference in Glasgow

The 26th United Nations Climate Change Conference, also known as COP26, was held in Glasgow, Scotland from October 31 to November 12, 2021.

The summit was attended by 25 thousand delegates from almost 200 countries and about 120 heads of state. The presidents of Russia and China did not attend the meeting.

As a result of the conference, the Glasgow Climate Pact was signed. According to experts, it turned out to be as politically correct and extremely vague as possible, which was a consequence of the need to take into account the interests of a large number of countries and other interested parties, including public organizations and business structures.

Initially, it was assumed that the agreement would stipulate the need to abolish the use of coal as fuel. However, at the last moment, under pressure from India and China, the formulation of coal “phase-out” was changed to “phase-down”, which can be translated as “reduction” or “phase-out”.

According to experts, the decision on coal, made at the summit, turned out to be more positive for the industry than expected. It is not planned to completely abandon coal-fired power industry; the summit only confirmed the intention to gradually abandon coal-fired power engineering. At the same time, India declared carbon neutrality only by 2070, and China - by 2060.

Other key provisions of the pact include the need to financially help developing countries to accelerate energy transitions, an end to deforestation by 2030, and a commitment to reduce methane emissions by 30% by the end of the decade. 

In particular, financial assistance from rich countries to poor and developing countries should exceed $ 100 billion a year. The pact speaks of "the need to mobilize climate finance from all sources."

In general, the Glasgow agreement was the result of numerous compromises and contradictions existing between different countries. As a result, it is not specific, does not oblige to anything, but only calls on.


The government will tighten responsibility for environmental violations during the transshipment of coal

The government will consider a bill from the Ministry of Natural Resources, which provides for the introduction of a fine for non-compliance with regulations on the elimination of environmental violations during the transportation, crushing and sorting of coal in ports. If the order is not fulfilled twice, the port's activities may be suspended for up to 90 days.

The ministry insists on the possibility of suspending the activities of the ports, despite comments from business representatives and the fact that this measure may have a significant negative impact on the industry. In addition, the proposed changes create discriminatory conditions for coal terminals compared to stevedoring companies handling other cargoes that may have an impact on the environment.

Discussion regarding the regulation of this type of activity, up to the prohibition of open transshipment of coal, has been going on for several years. In 2020, the Ministry of Transport issued an order that clarified the essence of the term “closed coal transshipment”: it is proposed to consider it as transshipment using the best available technologies, such as car dumpers, covered conveyors for coal transportation, ship loading machines, dust suppression and air purification systems, and other advanced technological solutions and equipment.

In the Far East of Russia, there are only a few such specialized coal terminals using the best available technologies: Vostochny Port AO (KRU), Daltransugol (SUEK), VaninoTransUgol (Kolmar), Posiet (Mechel), while most terminals still use outdated and non-environmentally friendly grab handling of coal.

In the structure of export cargo traffic, the share of coal is over 50%. Coal loading to ports in January-October 2021 amounted to 156.9 million tons (+16.6 million tons or + 12% compared to January-October 2020). About 53% of the total volume was sent to the ports of the Far East.

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