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Pulse of Coal - October 23
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
Last week, the European market saw a decline in coal prices below $ 210 / t. Pressure factors on prices were negative sentiments in the Chinese market after the requirements of the national regulator NDRC to reduce prices for energy material in the domestic market of the country, shutdown of enterprises in Europe due to the high cost of electricity, the growth of wind generation, as well as a technical correction of the markets.
The prices of futures contracts for gas at the Dutch hub TTF closed during the week at levels slightly above 90 Euro / MWh and did not show a sharp decline. Gazprom's refusal to book additional capacities of the Ukrainian GTS, as well as reserving only one third of the available capacity of the Yamal-Europe gas pipeline led to a short-term jump in gas prices to $ 1300 per thousand m3 (107.8 Euro / MWh). Coal stocks at ARA terminals fell to a 7-month low of 3.9 million tons, which is 9% below the level of the beginning of last week (4.3 million tons) and 37% below the level of the previous year (6.2 million tons).
South African indices followed the trend of European quotations, dropping below $ 200 / t. Exporters continue to experience difficulties in supplying coal to the Richards Bay Port Terminals (RBCT) due to problems with rail operator Transnet. According to forecasts, this year the volume of RBCT transshipment will be about 60 million tons, which is 14% lower than the 2020 level of 70.1 million tons.
On October 16.10.2021, 2022, the National Development and Reform Commission of China (NDRC) demanded that coal mining companies and traders reduce coal prices by the end of the winter season (March 5500). So for an average-calorie material of 1800 kcal / kg NAR, the price should not exceed 281.50 RMB / t FOB Qinhuangdao (2500 USD / t). Spot prices for this coal were at the level of 2600-390 RMB / t FOB Qinhuangdao (406.00-XNUMX USD / t). The regulator's requirement was not binding, but it was emphasized that companies that did not follow it would be limited in carrying capacity by rail. The NDRC also stated that every possible means will be used to bring prices back within a reasonable framework. According to market participants, the NDRC is ready to engage the police (Public Security Bureau) to monitor the implementation of the decrees.
The regulator's statements triggered a sell-off in the commodities market. Paper-based coal contracts at the Zhengzhou Commodities Exchange lost 8% in price, and several coal producers (China Energy Group, Jinergy Group and Inner Mongolia Yitai Group) announced their readiness to reduce prices to the required level.
The NEWC index of 6000 kcal / kg Australian high-calorie coal fell below $ 235 / t. The correction took place against the background of lower prices for European and South African material, as well as a more calm state of the gas market in Europe.
Indonesian coal price index 5900 kcal / kg GAR rose to $ 220 / t. against the backdrop of strong demand from China and Southeast Asian countries, as well as a limited supply of material. According to forecasts of meteorologists, heavy rains in the region will continue until February 2022, which will have a negative impact on production volumes in the key regions of the country - in Kalimantan and Sumatra.
Prices for metallurgical coal last week were in a sideways trend below $ 400 / t. On the one hand, there remains a limited supply of coking material and PCI coal on the Chinese domestic market. On the other hand, the market reacted by selling forward contracts following the NDRC announcements. In foreign markets, consumers (in particular India) preferred to take a wait and see attitude.
In January-September 2021, Ukraine's coal imports grew by 14%
In January-September 2021, the volume of Ukrainian coal imports increased to 14.5 million tons (+1.8 million tons, or + 14% compared to the same period last year).
10.8 million tons or 75% of all imports of material fell on Russian exporters, 2.5 million tons or 18% were shipments of coal from Kazakhstan and 1.2 million tons or 8% were supplied by the United States.
On June 15, 2021, the Ministry of Energy of Ukraine urged local coal-fired power plants to increase coal imports in order to increase material reserves to 3.0 million tons of coal ahead of the start of the heating season. Currently, coal reserves in Ukraine remain at a critically low level of 0.8 million tons (-0.2 million tons by 15.09.2021), which is 2.2 million tons less than the indicators planned by the Ministry of Energy for the 6-month heating season.
In 2020, Ukraine imported 17 million tons (-20% by 2019).
Far East ports are experiencing difficulties with the delivery of 15 million tons of coal by rail
According to the plenipotentiary representative of the President in the Far Eastern Federal District, Yuri Trutnev, about 15.0 million tons of coal were stuck on the approaches to the ports of the Far East. Due to the limited throughput capacity of BAM and Transsib, suppliers incur losses due to the gap between the volume of rail transportation and coal transshipment capacities in ports. Trutnev stressed that port facilities are not fully utilized, and Russian Railways needs to accelerate the construction and modernization of the railway network. According to the official, the main factors holding back the growth of coal exports are the problem of synchronizing railway and port projects, as well as the slow pace of construction of railway infrastructure, which cannot cope with the sharp increase in export supplies.
Photo: JSC "Daltransugol"
According to the Ministry of Transport, the throughput capacity of the railways of the Eastern Range (BAM and Transsib) by the end of 2020 amounted to 144.0 million tons, of which more than 100.0 million tons were coal shipments. It was assumed that the landfill will reach the indicated 144.0 million tons after the completion of the first stage of development of the development project in 2021 and will reach 180.0 million tons by 2024.According to the transport strategy of the Russian Federation until 2030, the throughput capacity of the Eastern landfill is planned to be increased to 240.0 million tons. T. by 2035
Due to the limited capabilities of BAM and the Trans-Siberian Railway, Russian Railways is not able to ensure the transportation of goods in the required volume, as a result, port facilities in the Far East remain underutilized, which is an obstacle to increasing coal exports, especially at the present time against the background of record high world indices.
An example is the largest in Russia JSC Vostochny Port, which launched the third stage of the terminal in 3 and, with a coal transshipment capacity of 2019-45 million tons, exported only 50 million tons of coal in 2020, .e. almost half its bandwidth. In 27, due to problems with the railway terminal, Daltransugol (SUEK) is likely to handle 2021 million tons with a terminal capacity of 20 million tons. JSC Vostochny Port is also 24 million tons behind last year's indicators. In other words, private companies that have invested heavily in capacity expansion are forced to suffer serious losses. At the same time, the construction of new port projects continues in the Far East, including the Vaninotransugol terminal (Kolmar), the Vera port (Elgaugol) and other announced terminals. Thus, at present, the development of transshipment capacities of the Far Eastern ports is ahead of the development of the throughput of railways.
In 2020, the transshipment of coal in the ports of the Far East, including the ports of Sakhalin Island, amounted to 189.0 million tons (+13.0 million tons or + 7.4% by 2019). In January-September 2021, the Far Eastern ports handled 80.9 million tons (+1.2 million tons, or + 1.5% over the same period in 2020)
Coal production in Kuzbass increased by 11.7% in January-September 2021
In January-September 2021, coal enterprises of Kuzbass produced 179.1 million tons of coal (+18.8 million tons or + 11.7% compared to January-September 2020), according to the Ministry of Coal Industry of Kuzbass. The production of coking material during this period decreased to 52.1 million tons (-2.8 million tons, or -5.1% compared to January-September 2020), while the production of thermal coal amounted to 127.0 million tons (+21.6 million tons). or + 20.5%).
Photo: JSC "INhead company "Northern Kuzbass"
Open pit coal companies produced 116.3 million tonnes (+16.9 million tonnes or + 17.0% versus January-September 2020), underground production increased to 62.8 million tonnes (+1.9 million tonnes or + 3.1% versus January- September 2020).
In September, 18.6 million tonnes of coal were shipped by rail, including 9.7 million tonnes westward, 4.5 million tonnes eastward and 4.3 million tonnes via local transport.
In September, 16.5 million tons of coal were supplied to consumers, including 11.5 million tons for export, 3.1 million tons to Russian metallurgical companies, and 1.0 million tons to local coal-fired power plants.
As of October 1, 2021, coal storage reserves in Kuzbass reached 16.0 million tons (-2.6 million tons, or -14.0% by October 1, 2020).
On March 03, 2021, Vladimir Putin called for an increase in the export of Kuzbass coal to the east to 68 million tons per year by 2024 compared to export supplies in 2020 at the level of 53 million tons.
In 2021, the coal enterprises of Kuzbass intend to increase coal production to 235 million tons (+15 million tons or + 6% by 2020).