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Pulse of Coal - June 5

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 - June 5
Special project Coal of the East of Russia

A brief overview of the global coal market

The steady growth of indices on the European steam coal market continued last week, exceeding

USD 100 / t The price of natural gas on the European trading platform TTF rose to 26.2 EUR / MWh (+0.8 EUR / MWh by 26.05.2021). The cost of carbon dioxide emission quotas was 51.4 € / t. (-1.4 EUR / t. By May 26.05.2021, 834). The decrease in the volume of wind generation in Europe to 386 GWh (-26.05.2021 GWh by May 5.0, 0.4) provided additional support to coal quotations. Coal reserves at ARA terminals amounted to 26.05.2021 million tonnes (+XNUMX million tonnes by May XNUMX, XNUMX).

On May 29.05.2021, XNUMX, Colombian coal producer Cerrejon announced the gradual resumption of mining operations following the lifting of the blockade from the company's railways.

The increase in the volume of coal combustion in the summer period in the APR countries contributes to an increase in the prices of South African material above 110 USD / t.

Last week, the Chinese domestic market saw an increase in coal prices, driven by strong demand for electricity amid rising temperatures. As of June 02.06.2021, 5500, the prices for coal 140 kcal / kg NAR of domestic production in the port of Qinhuangdao exceeded $ XNUMX / t.

Growing demand from Japan and South Korea has strengthened the Australian material indices over $ 120 / t. Taiwan also increased its consumption of Australian coal due to hot weather and power outages.

In anticipation of the summer season, Japan will increase its power generation from May 31 to June 6. Japan's CHP generation capacity is expected to increase by 4 MW, of which 132 MW is coal-fired. On May 650, 30.05.2021, the Japanese company Tohuku Electric resumed power generation at the Haramachi 1 coal-fired power plant, which went out of operation after the earthquake in February 2021.

On May 29.05.2021, 4, a fire occurred at the Shin-Kori 1.4 nuclear power plant with a capacity of XNUMX GW in South Korea, which led to the shutdown of the nuclear power plant, which will contribute to an increase in the volume of burning imported coal.

Despite the correction in quotations, steady demand from China and India continues to keep the prices of the Indonesian material 5900 GAR above $ 96 / t.

Indonesia intends to reduce the share of coal in the country's energy balance to 30% by 2025 and double the share of renewable energy sources from 11.2% in 2020 to 23% by 2025. The country also plans to suspend the construction of new coal-fired power plants in order to reduce CO2 emissions. which could limit coal consumption in the Indonesian domestic market in the long term.

The continuing rise in steel prices has a positive effect on the demand of metallurgical plants in the APR for coking coal from Australia and contributes to the growth of indices above $ 160 / t.


Elgaugol plans to replace Australian coal in the Chinese market

On June 02, 2021, the head of the state corporation Rostec Sergey Chemezov announced that Elgaugol, owned by A-Property Albert Avdolyan and Rostec, plans to expand its presence in the Chinese market. Against the backdrop of political tensions between China and Australia, Russian exporters are seeking to increase supplies and benefit from the ban imposed by the Chinese government on imports of Australian coal in May 2020. In January-April 2021, total coal imports from China fell to 90.2 million tons ( -36.6 million tons or -29% compared to January-April 2020). During the same period, Russia exported 14.6 million tons to China (+3 million tons, or + 26% compared to January-April 2020). The share of Russian supplies to China increased from 9.1% in January-April 2020 to 16.2% in January-April 2021.

 According to Sergei Chemezov, Elgaugol is capable of replacing 60-70% of Australian supplies to the Chinese market. The company intends to increase its coal production to 18 million tons in 2021 with a gradual increase to 45 million tons in 2023. The increase in volumes will also be achieved by expanding the capacity of the Elga-Ulak railway to 24 million tons per year. In December 2020, A-Property and the Chinese holding company GH-Shipping formed a joint venture to ensure the supply of material from the Elga coking coal deposit to the Chinese market. According to the estimates of representatives of A-Property, the volume of coal supplies to China is expected to reach 15.0-18.0 million tons in 2021, 20.0-24.0 million tons in 2022 and

30.0 million tons in 2023 with a subsequent increase to 50.0 million tons of coal per year. However, the main obstacles to increasing coal shipment volumes for Russian exporters are the limited capacities of the Baikal-Amur (BAM) and Trans-Siberian (Transsib) lines, as well as congestion of railways on the Russian-Chinese border. Despite plans to expand the capacities of BAM and Transsib to 180 million tons for all types of cargo by 2024, experts doubt that this will be enough to meet the demand for coal transportation to the east.

Since December 2020, China has been restricting imports of Russian coal through border crossings amid quarantine measures against the spread of Covid-19 imposed by the Chinese government. In January-April 2021, the railway export of Russian material to China decreased to 2.8 million tons (-0.1 million tons, or -3.4% compared to January-April 2020).


Ex-CEO of Sibanthracite will head Siban Holding

Maxim Barsky, the former CEO of the Sibanthracite Group and partner of Dmitry Bosov, who died in May 2020, received a 30% stake in Albert Avdolyan's Siban holding. The company was founded on May 26, 2021 to transfer the assets of the Sibanthracite Group to the ownership of A-Property, which owns the remaining 70% of the company. Also, Maxim Barsky was appointed CEO of the Siban holding.

Maxim Barsky
Photo: "Sibanthracite"

In February 2021, A-Property signed an agreement with the Alltek Group, owned by the heirs of Dmitry Bosov, on the basic conditions for the acquisition of Sibanthracite for $ 1 billion. Under the terms of the deal, Sibanthracite retains its independence as a company. The agreement involves the signing of long-term contracts with top managers of Sibanthracite, as well as their participation in the authorized capital of the company. Sibanthracite is the world's leading producer and exporter of high quality anthracite with a total annual production of more than 20 million tons of anthracite and T coal.

In 2018, Maxim Barsky was appointed CEO of Sibanthracite. In 2020, Barsky resigned, but retained his seat on the company's board of directors.

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