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India steps up initiatives to cut coal imports

  • Market: Coal
  • 04/05/20

India's coal ministry is stepping up efforts to persuade coastal utilities to use domestic coal as it works with the railways to cut logistics costs and encourages boiler retrofitting to reduce the country's reliance on imports.

The moves outlined to Argus by coal secretary Anil Kumar Jain are aimed at increasing coal sales by government-controlled producer Coal India (CIL), which is sitting on record-high stocks of 75mn t.

The ministry is making fresh attempts to improve rail logistics to coastal utilities, given that many of CIL's mines are in the middle of the country. "The cost of transportation often works against the competitiveness of coal to some locations, especially the coastal power plants. We are talking to the railways," Jain told Argus. The transportation to coastal utilities will constitute an additional business for the railways, he said.

The ministry also plans to approach utilities whose boilers are designed for imported coal to check if the economics work well enough to migrate to domestic coal. "They can retrofit the boilers to use Indian coal," said Jain. He estimates that such utilities, along with those owning mines overseas, together import about 55mn t/yr.

The government has aspired to reduce coal imports in the past but with no success. The country's thermal coal imports grew by 8.4pc to 185.5mn t in 2019, data from shipping agency GAC show. In March, receipts fell by 1.3mn t on the year to 14.72mn t after a Covid-19 nationwide lockdown was imposed from 25 March, data from shipbroker Interocean show.

Jain says there is a "greater resolve" now to reduce imports because of the global economic downturn. "Our aim is to promote import substitution, retain sale proceeds within the country and help local employment," he said.

Jain said coal minister Pralhad Joshi has taken on import reduction as a "mission" following "direction from the top". At a meeting held on 30 April, prime minister Narendra Modi spoke about the need to substitute imported coal with domestic fuel. Earlier, on 28 April, the Indian power ministry issued an advisory to utilities to reduce coal imports that are used for blending. Public sector utility NTECL cancelled a tender to import 560,000t of mid-calorific value (CV) coal on 24 April.

The advisory was intended to "sensitise" coal-consuming industries to not import "mindlessly" as domestic coal is available, Jain said. "The government is a buyer of the power generated from these utilities and it has a role to play in their operations." The advisory was also necessary, given the economic downturn, he said.

CIL has been given a target to produce 710mn t of coal in the 2020-21 fiscal year ending 31 March, up from 602mn t in 2019-20. Besides this, the utilities have stocks of about 50mn t, enough to meet their requirements for 30 days. "Since demand will be lower, we will have enough coal in the country," said Jain, who says the ministry hopes to replace almost 100mn t of imports with domestic fuel in the current fiscal year. But he said the government will be sensitive to cases where utilities have contractual obligations to import.

Success on replacing imports will depend on the economic viability of doing so for the utilities. The issue of price competitiveness between domestic and imported coal is usually raised when import reduction is discussed, admits Jain. But he said he never saw a coal consumer turn down assured domestic supply in favour of imports.

Jain's team has evaluated the comparative economics of the Indonesian coal index and Indian domestic coal on a calorific value-parity basis. Most Indian coal consumers find Indian coal cheaper than imports, with the exception of some utilities in the southern part of the country that face high freight costs, he said.


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23/07/24

US House passes waterways bill

US House passes waterways bill

Houston, 23 July (Argus) — The US House of Representatives overwhelmingly approved a bill on Monday authorizing the US Army Corps of Engineers (Corps) to tackle a dozen port, inland waterway and other water infrastructure projects. The Republican-led House voted 359-13 to pass the Waterways Resources Development Act (WRDA), which authorizes the Corps to proceed with plans to upgrade the Seagirt Loop Channel near Baltimore Harbor in Maryland. The bill also will enable the Corps to move forward with 160 feasibility studies, including a $314mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. Water project authorization bills typically are passed every two years and generally garner strong bipartisan support because they affect numerous congressional districts. The Senate Environment and Public Works Committee unanimously passed its own version of the bill on 22 May. That bill does not include an adjustment to the cost-sharing structure for lock and dam construction and other rehabilitation projects. The Senate's version is expected to reach the floor before 2 August, before lawmakers break for their August recess. The Senate is not scheduled to reconvene until 9 September. If the Senate does not pass an identical version of the bill, lawmakers will have to meet in a conference committee to work out the differences. WRDA is "our legislative commitment to investing in and protecting our communities from flooding and droughts, restoring our environment and ecosystems and keeping our nation's competitiveness by supporting out ports and harbors", representative Grace Napolitano (D-California) said. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US House to vote on waterways bill


22/07/24
News
22/07/24

US House to vote on waterways bill

Houston, 22 July (Argus) — The US House of Representatives is expected to vote on 22 July on a waterways bill that would authorize new infrastructure projects across ports and rivers. The Water Resources Development Act (WRDA) is renewed typically every two years to authorize projects for the US Army Corps of Engineers (Corps). The bipartisan bill is sponsored by representative Rick Larsen (D-Washington) and committee chairman Sam Graves (R-Missouri). The full committee markup occurred 26 June, where amendments were added, and the bill was passed to the full House . A conference committee will need to be called to resolve the different versions of the bill. The major difference between the bills is that the House bill does not include an adjustment to the cost-sharing structure for the lock and dam construction and other rehabilitation projects. The Senate Committee on Environment Public Works passed its own version of the bill on 22 May, with all members in favor of the bill. The House version of the bill approves modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland, along with 11 other projects and 160 feasibility studies. One of these studies is a $314.25mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Vietnam’s 1H 2024 coal imports hit all-time high


22/07/24
News
22/07/24

Vietnam’s 1H 2024 coal imports hit all-time high

Singapore, 22 July (Argus) — Vietnam's coal imports reached an all-time high in the first half of this year despite an on-year drop in seaborne receipts in June from a relatively high base last year. A growth in seaborne receipts led by strong utility demand took Vietnam's coal imports to 33.43mn t in January-June, up from 24.1mn t in the same period last year, according to customs data. Vietnamese customs data do not differentiate between coking and thermal coal. The imports in the first half of this year hit the highest level since Vietnam imported 30.61mn t in January-June 2020, according to Argus' analysis of the customs data. Imports were at 6.36mn t in June, down from a revised 7.21mn t a year earlier and 6.5mn t in May . This was the first year-on-year drop in imports since January last year. Vietnam's strong imports in the first half of the year comes amid heatwaves in the region, which has boosted power consumption and coal-burn at utilities. Vietnam is leading the growth in imports in the southeast Asian region, a trend that is helping to partly offset a lukewarm demand trend in China — the biggest coal importer in the world. Vietnam could end up importing over 66mn t of coal this year at the current average rate of 5.57mn t/month, according to Argus calculations. This could be the country's highest annual imports since the 55mn t of coal it received in 2020, and up from 51.16mn t in 2023. The on-year dip in imports in June came from a high base a year earlier when strong demand from utilities took the monthly imports to a record high. The dip also came as the coal-fired generation dropped to 12.37TWh in June from 17.08TWh in May this year, while the hydro-power generation more than doubled to 9.55TWh last month on a month-on-month basis, according to Argus calculations based on the data from state-owned utility EVN. The country's coal-fired generation, which accounted for 57pc of overall generation in January-June, could come under pressure on a steady uptick in hydropower output, owing to heavy rains in some parts of the country. Overall generation rose by about 12pc on the year to 151.7TWH in the first half of the year, while coal-fired generation reached 86.34TWh, up from 66.76TWh a year earlier, EVN data show. Hydropower generation was at 28.63TWh during the period, down from 29.83TWh a year earlier, according to the EVN data. Vietnam's northern regions may face heavy rains until 24 July as typhoon Prapiroon heads towards Vietnam after making a landfall in south China's Hainan, according to the country's National Centre for Hydrometeorological Forecasting. Coal-fired generation rose to cater for higher electricity consumption resulting from continued economic recovery and an uptick in air-conditioning demand. Power demand continues to grow, and the peak capacity of the national power system reached 49.53GW on 19 June, up from 45.53GW a year earlier, it said. Peak capacity might increase further to over 52GW this month, it added. Authorities have directed EVN and state-owned coal producers to ensure stable supplies to meet the increased power consumption. The uptick in power consumption and coal demand during the first six months and during the second quarter of the year was also supported by an increase in economic activity. Vietnam's GDP grew by 6.93pc in April-June from a year earlier. The increase in receipts of seaborne coal also followed softness in international coal prices, especially for coal from Vietnam's preferred origins — Indonesia and Australia. Argus assessed Indonesian GAR 4,200 kcal/kg coal at $52.38/t fob Kalimantan on 19 July, with the price of the grade recovering from a 10-month low of $52.07/t on 12 July. Argus assessed the Australian NAR 5,500 kcal/kg coal market at $87.61/t fob Newcastle on 19 July, down from $96.59/t fob Newcastle on 1 March — the highest value for the grade in the year to date. Power saving EVN has advised local authorities, businesses, commercial and residential consumers to ensure economical and efficient use of electricity. It has asked commercial units and households to reduce consumption, and advised them to not set air-conditioner temperatures below 26-27°C. Vietnamese authorities have asked power consumers to pay special attention to electricity usage during peak hours between 11:00am to 3:00pm local time (04:00-08:00 GMT) and 7:00pm to 11:00pm. By Saurabh Chaturvedi Vietnam's coal imports (mn t) Vietnam's Jan-June generation mix (TWh) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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South32 misses Australian coking coal output target


22/07/24
News
22/07/24

South32 misses Australian coking coal output target

Sydney, 22 July (Argus) — Australian-South African diversified resources company South32 was 2pc off its coking coal production target of 4.4mn t at its Australian Illawarra coal operations in the 2023-24 fiscal year to 30 June. The firm is on track to complete the sale of its Illawarra operations in New South Wales (NSW) state by the end of September, marking its exit from coal as it focuses on its non-ferrous metal portfolio. It completed three and started a fourth longwall move at the Appin and Dendrobium mines, leaving new owner Golden Energy and Resources and M Resources with a lower maintenance burden into 2025. South32's total coal production was down by 24pc in 2023-24 compared with the previous year, largely because of maintenance. The firm increased production in the fourth quarter and final half of 2023-24 after a weak first half but the quarter was still down by 15pc on April-June 2023. South32 expects its costs for 2023-24 to be around $150/t, which is in line with its guidance, which was raised from $140/t in February. It received an average price for its Illawarra coal of $275/t for its metallurgical coal and $113/t for its thermal coal for January-June compared with $276/t and $101/t respectively in July-December 2023. The firm's operating margins at its Illawarra metallurgical coal operations were $17/t on thermal coal and $152/t on metallurgical coal in 2022-23 when its operating costs were $127/t. It will release its 2023-24 results on 29 August. Argus last assessed the premium hard coking coal price at $229/t fob Australia on 19 July, down from $334.50/t on 19 January and close to the $235.50/t on 19 July 2023. It assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $134.87/t fob Newcastle on 19 July, up from $128.09/t on 19 January and down from $129.18/t on 19 January 2023. South32 last year dropped plans for a $700mn expansion at Dendrobium, following a dispute with NSW's water agency over its potential impact on water quality . Dendrobium, which supplies coking coal to the Whyalla steelworks in South Australia and exports from NSW's Port Kembla coal terminal, is expected to close in 2028. By Jo Clarke South32 Illawarra Coal output (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 2023-24 2022-23 2023-24 guidance Met coal production 1.27 1.24 1.50 4.31 5.50 4.40 Met coal sales 1.36 1.05 1.53 4.17 5.40 Thermal coal production 0.21 0.16 0.25 0.63 1.02 0.60 Thermal coal sales 0.18 0.19 0.17 0.70 0.96 Total production 1.49 1.41 1.75 4.94 6.52 5.50 Source: South32 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Trump vows to target 'green' spending, EV rules


19/07/24
News
19/07/24

Trump vows to target 'green' spending, EV rules

Washington, 19 July (Argus) — Former president Donald Trump promised to redirect US green energy spending to other projects, throw out electric vehicle (EV) rules and increase drilling, in a speech Thursday night formally accepting the Republican presidential nomination. Trump's acceptance speech, delivered at the Republican National Convention, offered the clearest hints yet at his potential plans for dismantling the Inflation Reduction Act and the 2021 bipartisan infrastructure law. Without explicitly naming the two laws, Trump said he would claw back unspent funds for the "Green New Scam," a shorthand he has used in the past to criticize spending on wind, solar, EVs, energy infrastructure and climate resilience. "All of the trillions of dollars that are sitting there not yet spent, we will redirect that money for important projects like roads, bridges, dams, and we will not allow it to be spent on the meaningless Green New Scam ideas," Trump said during the final night of the convention in Milwaukee, Wisconsin. Trump and his campaign have yet to clearly detail their plans for the two laws, which collectively provide hundreds of billions of dollars worth of federal tax credits and direct spending for renewable energy, EVs, clean hydrogen, carbon capture, sustainable aviation fuel, biofuels, nuclear and advanced manufacturing. Repealing those programs outright could be politically difficult because a majority of spending from the two laws have flowed to districts represented by Republican lawmakers. The speech was Trump's first public remarks since he was grazed by a bullet in an assassination attempt on 13 July. Trump used the shooting to call for the country to unite, but he repeatedly slipped back into the divisive rhetoric of his campaign and his grievances against President Joe Biden, who he claimed was the worst president in US history. Trump vowed to "end the electric vehicle mandate" on the first day of his administration, in an apparent reference to tailpipe rules that are expected to result in about 54pc of new cars and trucks sales being battery-only EVs by model year 2032. Trump also said that unless automakers put their manufacturing facilities in the US, he would put tariffs of 100-200pc on imported vehicles. To tackle inflation, Trump said he would bring down interest rates, which are controlled by the US Federal Reserve, an agency that historically acts independently from the White House. Trump also said he would bring down prices for energy through a policy of "drill, baby, drill" and cutting regulations. Trump also vowed to pursue tax cuts, tariffs and the "largest deportation in history," all of which independent economists say would add to inflation. The Republican convention unfolded as Biden, who is isolating after testing positive for Covid-19, faces a growing chorus of top Democratic lawmakers pressuring him to drop out of the presidential race. Democrats plan to select their presidential nominee during an early virtual roll-call vote or at the Democratic National Convention on 19-22 August. By Chris Knigh t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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