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Pulse of Coal - October 9
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 Europe renewed their all-time highs, reaching $ 300 / t, after which, due to high volatility, quotations corrected to $ 225 / t.
The rise in quotations was facilitated by a sharp rise in prices on the European gas market - on 06.10.2021/1900/3 paper contracts on the TTF hub exceeded the $ 76 / th. m10 followed by a correction. European gas storage facilities are currently 2% full, but this is still the lowest in 4.46 years and insufficient for the upcoming winter season. According to experts, the launch of Nord Stream 0.02 this winter is unlikely to increase Russian gas supplies to Europe and help the EU cope with the energy crisis. Coal reserves at ARA terminals amounted to 29.09.2021 million tons (+2016 million tons by 2020), which is also below the average levels of XNUMX-XNUMX.
The increased demand of consumers from Europe and the Asia-Pacific countries, who are seeking to replenish stocks ahead of the winter season, had a positive effect on the indices of the South African material, amounting to $ 218 / t. An additional factor behind the rise in prices is the problem with the railway line connecting the coal-mining provinces of South Africa and the port of Richards Bay. Material stocks at Richards Bay terminals decreased to 3.18 million tons (-0.39 million tons to 29.09.2021/XNUMX/XNUMX)
From 01.10.2021/07.10.2021/XNUMX to XNUMX/XNUMX/XNUMX, a non-working week was announced in China in connection with the celebration of the day of the formation of the PRC.
On October 06.10.2021, 1, it became known that against the backdrop of a growing energy crisis and a shortage of coal reserves at enterprises, the Chinese government, after an informal ban on coal imports from Australia that lasted for almost a year, permitted the customs clearance of Australian coal from temporary storage facilities on its territory. In total, about XNUMX million tons of Australian coal have accumulated in the customs warehouses of China during the year.
On October 07.10.2021, 27, the Chinese government suspended the operation of XNUMX coal mines and the Tongpu railway line in Shanxi, China's largest coal-mining province, due to floods and unfavorable weather.
The high trading activity of consumers from the Asia-Pacific countries, as well as the limited supply of coal on the world market, supported the Australian material indices above $ 247 / t.
Indonesian coal producers do not have time to increase the production of the material against the background of increasing demand, which is why the price of the Indonesian material of 5900 kcal / kg GAR remained at the same level, amounting to $ 150 / t. The recovery in production was hampered by heavy rains in South and East Kalimantan in September, as well as problems with logistics, infrastructure and lack of funding.
Despite the downtrend that has been observed since the middle of the week, the market is trying to find a support level. Supplies from South Africa, Indonesia, and Russia are extremely limited. Prices for Russian materials on FOB basis are not decreasing - see the table below.
Strong demand from India offset the downturn in Asian traders' trading activity and strengthened quotes for Australian coking material to $ 396 / t. An additional factor in the rise in prices is the shortage of coking material on the world market.
Kuzbass coal companies will be able to increase exports to the east only by concluding additional agreements
The Russian government obliged the coal companies of the Kemerovo region to conclude investment agreements with the regional government for export shipments in the eastern direction of more than 53 million tons of coal per year.
Exports to the east of 53 million tonnes of coal are the "baseline". It was installed in 2020 and is scheduled for implementation in 2021. The document deals with the income from the export of "additional volumes of coal products eastward from the Kemerovo region" above the designated baseline.
The essence of investment agreements is the direction of part of the income for the implementation of projects not related to coal mining, energy, housing and communal services and the social sphere. According to the government's estimates, the conclusion of investment agreements will attract about 14 billion rubles. (190 million dollars) for the implementation of investment projects in the non-coal sectors of the Kuzbass economy and create up to 6 thousand jobs.
Companies can enter into an investment agreement on a private initiative. A separate agreement will be concluded with each of the companies. And the distribution of additional carrying capacities and volumes will be carried out by the Ministry of Energy and will depend on the total number of additional volumes declared by all shippers.
The parameters of the investment agreement will be established by the Ministry of Economic Development of the Russian Federation. The implementation of the agreement will be monitored by the government of Kuzbass. Failure to comply with the investment agreement will lead to the immediate termination of shipments of additional volumes of this shipper.
Earlier, the Ministry of Economic Development of the Russian Federation proposed to oblige the coal companies of the Kemerovo Region to allocate at least half of the profits from the export of additional (compared to the level of 2021) volumes of coal products in the eastern direction for investments in non-coal projects.
In March 2021, at a meeting with the participation of Russian President Vladimir Putin, it was decided to increase coal exports from Kuzbass eastward by at least 30% by 2024 (i.e., up to 68 million tons against 53 million tons. in 2021). At the end of August, the government confirmed its intention to implement these plans.
Uzbekistan plans to increase coal imports
Coal consumption in Uzbekistan in 2021, according to the fuel balance approved by the Ministry of Energy of the country, may increase by 1.4-1.5 million tons to 9.4-9.5 million tons, while the volume of imports may grow by 0.9 million tons to 3.8 million tons.
The main supplier of imported coal to Uzbekistan is Kazakhstan. At the end of 8 months of 2021, the country imported 0.7 million tons of Kazakh coal, which is 0.3 million tons less than in the same period in 2020. In total, in 2020, coal imports from Kazakhstan amounted to 2.1 million tons. In addition, 0.8 million tons. was imported from Kyrgyzstan and Tajikistan.
The main consumer of solid fuel in the country is the Angren and Novo-Angren TPPs located in the Tashkent region. In 2020, these enterprises purchased a total of 4.3 million tons of coal (2.8 million tons of local and about 1.5 million tons of imported material).
Port Posiet fined for environmental damage
The Primorsky Transport Prosecutor's Office fined the Posiet port (part of the Mechel group) for environmental violations during the transshipment of coal. The company must pay a fine of 622 thousand rubles. (8.6 thousand dollars). In June 2021, the port was already fined 980 thousand rubles. (13.6 thousand dollars) for similar violations.
Photo: Mechel PAO
In accordance with the statements of the prosecutor's office, environmental damage was caused due to the use of gantry cranes with grab buckets when handling coal, as well as due to the storage of production and consumption waste in the warehouse. Moreover, the company provided inaccurate information on the maximum permissible emissions of harmful and polluting substances for coal dust.
According to Mechel's statements, the Posiet port is currently implementing an environmental program. Within the framework of this program, the second stage of automated equipment for dust suppression at open storage areas has already been launched. It is also planned to build windscreens along the border of the production area and put into operation a new shiploader. All this will significantly reduce environmental pollution. Investments in environmental projects in 2021–2022 will amount to about 1 billion rubles. ($ 13.9 million).
Port Posiet belongs to the Mechel group and is capable of handling up to 9 million tons of coal per year. In January-August 2021, the port handled 3.4 million tons of coal.