Coal
Overview
Global thermal coal prices surged to record levels in 2022, experiencing unprecedented volatility. Prices have since come off as risks associated with Europe’s supply recede. At a global level, coal demand remains robust with security of supply shifting higher up the agenda of many governments in light of geopolitical upheaval.
In Europe, sanctions have shifted the region’s coal import mix away from Russia and towards other suppliers. The pace of coal plant phase-outs in the region is set to increase in the years ahead, with the role of coal in the electricity mix shifting further towards peak-load usage, making forward planning more challenging.
In Asia-Pacific, thermal coal remains a pillar of the power and industrial sectors. Global coal trade flows and price spreads are shifting, with flows from key suppliers Russia, Indonesia, Australia, South Africa, Colombia, and the US penetrating new markets, in response to price dynamics and trade barriers.
Keeping on top of prices and flows, and how coal markets intersect with other energy and commodity benchmarks, will be critical in the coming years.
Latest coal news
Browse the latest market moving news on the global coal industry.
US elections offer energy transition juncture
US elections offer energy transition juncture
Washington, 21 October (Argus) — The 5 November elections are likely to have an outsized effect on the trajectory of US renewable energy growth, electrification of its economy, and investment in climate-related technologies, such as carbon sequestration and clean hydrogen. Vice-president Kamala Harris, the Democratic presidential nominee, has embraced the energy transition and backed policies meant to support a "thriving clean energy economy". In 2022, she cast the tie-breaking vote for the Inflation Reduction Act (IRA) and its vast spending on clean energy, while serving alongside President Joe Biden to support regulations that would cut down on CO2 from power plants and accelerate the transition to electric vehicles (EVs). If elected, Harris would continue to enforce those climate-focused regulations and defend them from challenges in court. Those policy views are anathema to former president Donald Trump, who has made mocking the energy transition a recurring part of his stump speech. Wind energy is "bullshit" and responsible for causing cancer and killing whales, Trump claims without evidence. He wants to curtail government support for EVs, which he says are straining the grid and wasting taxpayer support, and to "terminate" the clean energy spending in the IRA. And he sees investment in batteries as a boon for China and is sceptical of using hydrogen in transport because he says the fuel is likely to "blow up". Trump plans to again pull the US out of the "horrendously unfair" Paris climate accord and "immediately stop" enforcement of Biden-era energy efficiency rules, his campaign says. Harris and Trump can unilaterally advance some of their related to clean energy through executive orders and regulatory action, such as revising which energy projects will qualify for billions of dollars in IRA tax credits. But fully repealing clean energy spending or overhauling permitting laws will hinge on control of the US Congress, which polls suggest could again end up with slim majorities in both chambers. Clean energy tax credits at risk The White House estimates that more than $265bn in clean energy investment has been announced since the passing of the IRA more than two years ago, with further energy spending backed by the 2021 bipartisan infrastructure law. Those laws will deliver a combined $1 trillion or more in federal funding and tax credits for renewable energy, batteries, electric transmission, clean energy manufacturing, EVs and other climate-related spending over 10 years, according to some estimates. Harris has committed to carry through with that industrial policy and "expand our lead in clean energy innovation and manufacturing", her campaign says, with a goal of building a workforce that will benefit from addressing climate change. Harris wants to finish clean energy projects quickly and efficiently by "cutting red tape". If elected, Trump plans to "terminate the Green New Deal" and rescind all unspent funds in the IRA, which would free up revenue that could go to other priorities such as tax cuts. But he would face stiff opposition from the industry groups and Republican-led districts that are seeing billions of dollars of investments as a result of the law. In September, 18 House Republicans urged against a "full repeal" that they say would waste billions of dollars and undermine growth in their districts. "I hope we look at it in a surgical way and not just take a sledgehammer to it," Georgia representative Buddy Carter says. Oil industry officials back some tax credits in the IRA, such as the 45V tax credit for producing low-carbon hydrogen and an expanded tax credit for sequestering carbon. The hydrogen tax credit is driving "a lot of investment" across Republican-led states, ExxonMobil Low Carbon Solutions vice-president of advocacy Erik Oswald says. In the US, battery-only EVs are expected to account for more than half of car and passenger truck sales within eight years, under tailpipe standards that environmental regulator EPA finalised this year for model years 2027-32. The rule will require automakers to meet increasingly stringent CO2 limits through options such as more efficient engines and selling a greater share of hybrids and EVs. A tax credit of up to $7,500/vehicle from the IRA will support that regulatory goal, lowering the cost of purchasing EVs that are made in the US. But Trump says the tailpipe rule — which is being challenged by states and industry groups in court — is an "EV mandate" that will wipe out auto industry jobs and "end" the use of gasoline-powered vehicles. Trump regularly attacks EVs over what he says is the difficulty of finding charging stations, the added weight of batteries, their limited range and their use of imported parts from China. He previously rolled back fuel-economy standards for model year 2022-26 vehicles during his first term. Predictably, oil groups also oppose the EV tax credit. "We don't think it needs this level of support from taxpayers," refiner group American Fuel & Petrochemical Manufacturers president Chet Thompson says. Harris has yet to say if she wants to change the tailpipe rule, but she rejects its characterisation as a mandate to go electric. "I will never tell you what kind of car you have to drive," she says. With EVs gaining market share globally, Harris says the US needs to develop its manufacturing capacity so it can remain competitive, something she says did not occur when Trump was in the White House. "When it came to building the cars of the future, Donald Trump sat on the sidelines and let China dominate," Harris says. A rare area of agreement between the campaigns is the threat that EV imports from China — some of which sell for less than $10,000 in China — could pose to US automakers. This year, the Biden-Harris administration issued a 100pc tariff on Chinese EVs in response to alleged "unfair trade practices". Trump says he will go further by imposing a "100pc, 200pc, 2,000pc tariff". And, if elected, Trump says he will tell Mexico and Canada that he wants to renegotiate his own trade agreement, the USMCA, as a way to block Chinese auto parts from being brought into the US through their borders without being subjected to tariffs. Regulatory deja vu In his first term, Trump dismantled climate regulations such as the Clean Power Plan, which attempted to cut CO2 emissions from existing power plants primarily by reducing how frequently coal and inefficient gas-fired generators would operate. If re-elected, Trump would again work to dismantle replacement regulations from the Biden administration, which would require most existing coal-fired plants to add carbon capture systems or retire by 2032. Harris is "shutting down power plants and destroying our electric grid", Trump says. Harris has yet to speak in depth on the power sector regulations, but offered support for "tackling the climate crisis" and holding "polluters accountable", her campaign says. If elected, she would be responsible for defending the regulations in court and issuing a replacement rule if it fails to survive litigation. Trump's push to dismantle vast numbers of environmental rules would occur in a relatively untested legal landscape, after the US Supreme Court this summer overturned the decades-old ‘Chevron doctrine' that tended to give federal agencies a built-in advantage in court. The Supreme Court in a separate ruling opened up the possibility of lawsuits against decades-old rules — a possible opening for a Trump administration to work with industry to chip away at long-standing regulations. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
CSX forecasts softer 4Q rail demand
CSX forecasts softer 4Q rail demand
Washington, 17 October (Argus) — Eastern US railroad said it expects that fourth quarter commodity market conditions will be mixed, limiting some freight demand. "Going into the fourth quarter, near-term conditions look modestly more challenging," chief executive Joe Hinrichs said on Wednesday. But the railroad expects "modest volume growth", supported by a few segments including chemicals and agriculture. But lower locomotive fuel prices and the impact of international coking coal prices, which are linked to export rail contracts, could drive a decrease in total revenue during the fourth quarter. He estimated that impact at roughly $200mn compared with last year's fourth quarter revenue of $3.68bn. CSX expects to see a carryover of year-over-year momentum in chemicals, agriculture and food, forest products and minerals, while metals and automotive will continue to be challenged. Demand for metals shipments is predicted to soften through the end of the year. Interest in shipments, particularly steel, is soft because of "sluggish demand, ample supply and low commodity prices", chief commercial officer Kevin Boone said. A weaker-than-anticipated automotive market contributed to the drop in metals demand. Consumer demand for automotive products has been reduced by high retail prices and interest rates, which has led to increased dealer inventories and slower production, Boone said. But CSX expects that an "interest rate easing cycle will help these markets normalize," Boone said. Metals and equipment volume fell in the second quarter, primarily because of lower steel and scrap shipments. Shipments of metals and equipment fell by 9pc to about 64,000 carloads compared with the same three months in 2023. Revenue dropped to $208mn, down by 8pc from a year earlier. Automotive volume dropped in the second quarter because of lower North American vehicle production, CSX said. Automotive traffic fell to 301,000 railcars loaded, down by 2pc from the third quarter 2023. Automotive revenue dropped to $98mn, down by 3pc compared with a year earlier. The outlook for fertilizer shipments is mixed following the third quarter as a decline in long-haul phosphates shipments persisted. Volume was negative, but the railroad was able to haul some profitable spot shipments. Shipments of fertilizer fell to 45,000 carloads in the third quarter, down by 4pc from a year earlier. Fertilizer revenue dropped to $118mn, down by 5pc from a year earlier. CSX expects growth in some market segments. Chemicals freight demand is expected to continue growing following "consistent, broad strength across plastics, industrial chemicals, LPGs, and waste. That demand helped boost chemicals volume by 9pc compared with a year earlier. Chemicals revenue rose to $727mn in the second quarter, up by 13pc compared with a year earlier. Agricultural and food products shipping demand is expected to continue growing, led by demand for grain and feed ingredients from the Midwest for supplies. That follows a third quarter when higher ethanol shipments, as well as increased overall volume helped raise volume by 9pc from the third quarter of 2023. Revenue from shipping agricultural and food products rose to $416mn, up by 11pc from a year earlier. CSX expects intermodal growth to continue with the trucking market falling, which would help drive more container freight to rail. Intermodal shipments are goods shipped in containers and trailers between different modes of transportation. The 1-3 October strike by the International Longshoremen's Association (ILA) did impact intermodal traffic, but the railroad was pleased with the "relatively quick short-term solution", Boone said. International intermodal volume during the third quarter rose because of higher east-coast port traffic. Domestic volume was mostly flat. Overall intermodal volume during the quarter increased by 3pc compared with a year earlier. But lower revenue per container helped reduce total intermodal revenue by 2pc to $509mn. CSX does not expect a major shift in coal volume through the end of the year as coal markets seem relatively stable and utility stockpiles are sufficient, Boone said. Rising natural gas prices are also unlikely to stimulate a "near-term step-up in volumes". Export coal demand has been consistent lately, particularly from buyers in Asia. But revenue per railcar for export coal could make a modest single digit drop, as contracts are tied to international coal benchmarks and prices fell earlier this year. Expport coal voume rose to 11.1mn short tons (10.1mn metric tonnes) in the second quarter on higher demand for thermal and coking coal. But domestic coal deliveries fell to 10.2mn st, down by 12pc from a year earlier, on lower deliveries to power plants and lake and river terminals. Rail coal volume fell by 2pc from a year earlier, while revenue dropped by 7pc to 553mn st. Total CSX profits rose to $894mn, up by 8pc compared with third quarter 2023. Revenue increased to $3.6bn, up by 1pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India plans to quadruple power capacity to meet demand
India plans to quadruple power capacity to meet demand
Singapore, 15 October (Argus) — India plans to raise its electricity generation capacity by more than fourfold over the next two decades to cater to rising domestic demand, although the focus would be on boosting power production from cleaner sources of energy as the country takes steps to cut emissions. The goal is to collaborate with all the stakeholders and achieve a generation capacity of 2,100GW by 2047, power minister Manohar Lal Khattar said at the launch of National Electricity Plan for power transmission in Delhi. India has a current installed capacity of about 453GW, with nearly half of it coming from coal and lignite. The country anticipates peak power demand to reach 708GW by 2047, from an anticipated 257GW in the current financial year that ends in March 2025. The South Asian nation wants to aggressively grow its renewable and non-fossil fuel-based power generation capacity and steadily trim reliance on coal, in line with international commitment to reduce emissions and achieve net zero by 2070, the minister said. The plan includes raising non-fossil energy capacity to 500GW by 2030 and further to over 600GW by 2032, he added. The plans envisage a subdued role of coal in India's energy mix, although much would depend on the execution of the ambitious strategy given that developing countries, including India have prioritized energy security over international commitment to lower carbon emissions. India's non-fossil fuel growth plan stipulates the integration of 10GW of offshore wind farms, 47GW of battery energy storage systems, and 30GW of pumped-storage plants to address the power needs of green hydrogen and green ammonia manufacturing hubs with cross-border interconnections, the power ministry said. The pumped-storage capacity would be increased to 116GW by 2047 from 4.7GW at present, while the country would see a solar power capacity of 1,200GW and wind-power-generation capacity of 400GW over the same period. India has a solar power capacity of 91GW at present, while wind power capacity stands at 47GW. The overall generation growth would also include "flexible operation" of thermal and nuclear plants, the ministry said. The country also plans to add 190,000 circuit kilometres of transmission lines and boost its power transformation capacity over the next decade at an estimated investment of 9 trillion rupees ($107bn). The aim is to have a transmitting capacity to supply expanded renewable power capacity over the next six to eight years and grow the overall grid capacity. The power transmission plan also covers cross-border interconnections with Nepal, Bhutan, Myanmar, Bangladesh, and Sri Lanka as well as potential interconnections with countries like Saudi Arabia and the UAE. By Saurabh Chaturvedi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Wolverine Fuels reopens Utah coal mine
Wolverine Fuels reopens Utah coal mine
New York, 14 October (Argus) — US coal producer Wolverine Fuels has reopened Utah's Fossil Rock mine, which had sat idle for 23 years, after the state's coal output fell to its lowest level since 1992. Wolverine subsidiary Fossil Rock Resources, which owns the mine, "has produced minimal quantities of coal as a result of its rehabilitation efforts" at Fossil Rock, Wolverine vice-president of commercial operations Patrick Barrett said. The underground mine is located in Emery County, Utah, and last produced coal in 2001. Wolverine, formerly known as Bowie Resource Partners before rebranding in 2018, acquired the mine from PacifiCorp's Energy West Mining, nine years ago. Fossil Rock produced 8,611 short tons (7,811 metric tonnes) of bituminous coal in the third quarter, according to MSHA. The producer had around 76 workers at the mine last quarter, up from an average of 34 in the second quarter. Wolverine will mine coal at the Fossil Rock mine in small quantities this year. Then the plan is to have a full longwall panel developed and ready to put in place in the next two years. US Mine Safety and Health Administration (MSHA) officially changed the status of the mine to "active" on 4 September. Back in February, US utility PacifiCorp amended its coal supply agreements with Wolverine for its Hunter and Huntington coal-fired power plants to accommodate anticipated output from Fossil Rock. The coal supply agreement contemplated coal from Fossil Rock being shipped to the Hunter plant, although coal could also be directed to the Huntington plant as needed. PacifiCorp did not immediately respond to a request for comment. Wolverine's initiative to reopen Fossil Rock comes in the wake of a September 2022 fire at American Consolidated Natural Resources' Lila Canyon mine, which is also located in Emery County. That mine was closed in January 2024. Fossil Rock hired some of Lila Canyon's former workers and purchased some of its equipment. The closure of Lila Canyon dealt a blow to Utah coal production. Output in the second quarter of this year fell to 1.03mn st, down by nearly 35pc from the same period in 2023. That was the lowest quarterly production since the fourth quarter of 1992. Some of Lila Canyon's former customers, including 1,800MW Intermountain Power plant, had to use more Colorado, Wyoming and Illinois basin coal this year. The Utah Governor's Office of Economic Opportunity on 11 July awarded Wolverine a post-performance tax credit that was tied to Wolverine's plans to add jobs in Emery County over the next five years. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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