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Pulse of Coal - August 28
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, thermal coal indices in the EU recovered to around $ 150 / t. amid improving sentiment in the coal market. Recent speculation over Gazprom's plans to launch Nord Stream 2 in October 2021 has slowed gas price increases, negatively affecting coal demand. However, on August 25, 2021, Germany refused to remove the Nord Stream 2 operator from the EU gas directive, according to which Gazprom should not be the only user of the pipeline and will be able to supply no more than 50 percent of the expected gas volume. As a result, TTF gas quotes rose to 45.4 € / MWh (+0.5 € / MWh by 18 August 2021). The prices of European emission allowances have dropped to 56.5 € / t. (-0.6 EUR / t. To 18.08.2021). Coal reserves at the ARA terminals amounted to 4.40 million tons (+0.04 million tons to 18.08.2021). The limited supply of coal in the international market continues to support coal prices. Among the key coal exporting countries, only Russian mining companies managed to restore production volumes to the level of 2019. Exports of thermal coal from Russia in January-July 2021 amounted to 132.40 million tons (+3.19 million tons compared to January-July 2019) ...
Increased demand from Pakistani generating companies for South African coal to some extent offset the decline in trading activity of Indian consumers and strengthened coal prices above $ 140 / t. According to experts, prices for South African material may rise until the end of 2021 amid problems with the railway line connecting the coal-mining provinces of South Africa and the port of Richards Bay.
South African state-owned Eskom has announced plans to shut down 8-12 GW of its coal-fired generating capacity over the next 10 years, which is about 30% of current capacity. This decision is motivated by the generator's strategy to reduce CO2 emissions.
Coal prices of 5500 kcal / kg NAR of domestic production in the port of Qinhuangdao exceeded $ 162 / t. Steam coal imports to China are declining due to the country's 14-day quarantine.
The downturn in trading activity in the Asia-Pacific countries negatively affected the indices of Australian material and weakened the quotes of coal from Australia below
$ 177 / t Due to the worsening epidemiological situation in the key coal mining regions of Australia, the ban on coal mining was extended until 28.08.2021.
The Indonesian government allowed large mining companies to resume their planned export program, which slightly weakened indices of Indonesian material below $ 127 / t.
The ongoing ban on coal mining in Australia from 05.08.2021/28.08.2021/19 to 245/XNUMX/XNUMX due to the outbreak of COVID-XNUMX supported quotations of Australian coking coal above $ XNUMX / t.
Elgaugol is ready to build a railway line to the Sea of Okhotsk for 97 bn. Rub.
On August 20, 2021, Elgaugol, owned by A-Property and the state corporation Rostec, sent to the Ministry of Transport an estimate of the cost of building a new railway line between the Elginsky coal deposit and the Sea of Okhotsk, which, according to the company's calculations, is RUB 97 billion. ($ 1.3 billion). The railway line with a length of about 500 km assumes a throughput capacity of 30 million tons per year. In July 2021, Elgaugol proposed to implement this project at its own expense.
The company plans to spend 37.3 billion rubles. (504 million dollars) out of 97 billion rubles.
(1.3 billion dollars) for the construction of the railway line itself, 28.4 billion rubles. (383.6 million dollars) - for the purchase of rolling stock and 31.3 billion rubles.
(412 million dollars) - for the construction of a port in the Sea of Okhotsk.
However, according to experts, the construction of a railway line can be significantly more expensive, given the complexity of the project. The estimated construction period is 5 years. The Elga – Chumikan railway line is expected to be private and can only be used by Elgaugol.
The company is ready to start implementing the project, provided that Russian Railways concludes an agreement with Elgaugol on guaranteed export of 30 million tons of coal per year to the ports of the Far East along the Baikal-Amur Mainline (BAM) for the entire construction period. This will enable Elgaugol to generate sufficient cash flow to build a railway line.
According to Oleg Belozerov, Director General of Russian Railways, the decision on the priority in the transportation of a specific cargo is not within the competence of the state monopoly, since Elga's conditions can be met by amending federal laws and rules for non-discriminatory access of carriers to public railway infrastructure. Moreover, the implementation of Elga's requirements may lead to an additional load on the railway network due to the limited transportation of goods along the BAM.
VSK coal terminal in the Russian Far East to stop coal transshipment
The Eastern Stevedoring Company (VSK), a member of the Global ports group, announced the suspension of coal transshipment from September 2021.
According to Ilya Dolgov, VSK CEO, the terminal operating at the port of Vostochny in the Russian Far East will now focus on transshipment of containerized cargo, given the growing demand for container shipping in the market, and the company's transition from coal to a greener business.
Photo: Vostochnaya Stevedoring Company
In 2020, the volume of VSK transshipment reached 2.0 million tons of coal supplied by Kolmar and the Sibanthracite group (+0.4 million tons by 2019). According to experts, now coal supplies to the VSK terminal can be transshipped at the terminal of Vostochny Port JSC. The terminal's capacity is 50 million tons, while the volume of its transshipment in 2020 reached only 26.9 million tons due to the lack of railway throughput at the Eastern landfill.
Vostochnaya Stevedoring Company is one of the largest container terminals in the Russian Far East, part of the Global Ports group, an operator of container terminals on the Russian market. Global Ports includes five container terminals in Russia (Petrolesport, First Container Terminal, Ust-Luga and Moby Dick Container Terminal in the Baltic Sea, Eastern Stevedoring Company in the Far East) and Multi-Link terminals in Helsinki and Kotka). Global Ports also owns the Yanino Logistic Park inland container terminal near St. Petersburg.
The main shareholders of Global Ports are Delo Group of Companies (30.75%), one of the largest private transport and logistics holdings in Russia, and APM Terminals BV (30.75%), whose main activity is the design and construction of ports and terminals.
Coal terminal Yug-2 in Ust-Luga will give way to a gas complex
Yug-2, the second largest coal terminal in the port of Ust-Luga, may suspend coal transshipment after 2022 in connection with plans by gas companies to build a gas processing plant on the territory of the terminal with a capacity of 13 million tons of LNG per year.
In May 2021, Gazprom and Rusgazdobycha announced their intentions to build a gas complex on the shores of the Baltic Sea. In addition to the gas processing plant, the project of the complex involves the construction of a new terminal and the use of the railway infrastructure of the Yug-2 coal terminal for LNG transshipment. The construction of the terminal will be carried out during 2022-2026, while the first stage of the gas processing plant will be launched in 2023, the second stage - in 2024.The new terminal may become one of the largest export gas transshipment enterprises in Russia.
According to experts, after the termination of coal transshipment at the Yug-2 terminal, coal exporters may increase supplies through the north-western port of Lavna, which will be built by 2023, and the southern port of Taman. SDS-Ugol, Sibanthracite Group, CPC and Russky Ugol are among the key exporters supplying material through the Yug-2 terminal.
Yug-2 is a key asset of New Utility Technologies (NKT), owned by Russian businessman Ilya Traber. He also co-owns 10 companies, including the Primorsky universal loading complex in St. Petersburg and one of the largest generating companies in the Leningrad region, LOESK.
In 2020, the volume of coal transshipment at the Yug-2 terminal amounted to 13% of the total coal transshipment at the port of Ust-Luga, or 5.09 million tons (+1.9 million tons, or + 59% by 2019). The total volumes of coal transshipment in the port of Ust-Luga for the same period reached 37.79 million tons of coal (+4.07 million tons or + 12% by 2019).