Vietnamese coal imports jump to record high: Update
Updates to include power generation data throughout
A surge in Vietnamese coal imports helped absorb some oversupply in the seaborne market last month, as weak hydroelectric generation supported coal burn.
Vietnam imported a record 6.25mn t in April, up by 65.3pc on the year, customs data show. The data, which do not differentiate between coking and thermal coal, also show a rise in receipts from 4.45mn t in March.
Lockdowns in key coal-importing countries such as India slashed consumption and drove an oversupply of seaborne thermal coal, with Vietnam emerging as a key source of flexible demand able to absorb some of the surplus.
Vietnamese coal-fired power generation rose by 7.7pc on the year to 11.4TWh in April, state-owned power company EVN said. This was despite a 9.2pc decline in total generation, as weak hydro output created a deficit that coal has helped to fill in 2020.
Vietnamese hydro generation was down by 36.5pc on the year in January-April at 11.6TWh, while coal-fired generation was up by 17.6pc at 45.33TWh, EVN said. This is the equivalent of an additional 2.6mn t of NAR 5,500 kcal/kg coal burn in 40pc efficient plants in January-April.
The near-term outlook for shipments to Vietnam looks strong amid prospects of increased demand at a time when buying requirements are lower than usual in other key coal-consuming markets in Asia.
Prolonged heatwaves are expected to support power demand in May, EVN said, which may support coal use amid weak hydro availability. Vietnamese coal-fired generation is already on an upward trend, as the country commissioned 1.2GW of new capacity last year to bring its total to 19.2GW. Another 2.1GW is scheduled to come on line this year and a further 3.7GW of capacity is under construction, with commissioning set for 2021.
A dip in domestic coal supply has further tightened fundamentals in Vietnam this year, with the country's production down by 2.2pc at 12.6mn t in the first quarter.
Vietnam's imports were also facilitated by a steady easing of its nationwide social distancing directive, which started on 1 April and was imposed for two weeks.
Economic activity was resilient compared with other countries, but still slowed, with industrial production falling by 10.5pc on the year in April, the general statistics office said. Vietnam's electricity generation dipped to 17.9TWh last month, from 19.2TWh in April 2019 and 19.8TWh in March 2020.
Vietnam was a willing recipient of additional supply last month and reputedly secured cargoes at knock-down prices in March and early April, given the absence of other key buyers in the market. Vietnamese buyers were able to pick up some Indonesian and South African cargoes originally intended for India, which went into lockdown from 25 March. Some Australian coal was also targeted at Vietnam at tempting prices after demand from usual buyer China cooled amid high domestic stocks and limited requirements.
Australian coal accounted for much of last month's increase in imports, with receipts of all grades of from Australia gaining by 581,980t on the year to about 2.08mn t.
Indonesia accounted for 1.74mn t of April imports, up by around 474,521t on the year. Vietnam imported about 1mn t from Russia in April, up from 697,738t a year earlier.
Although Vietnam's provisional customs data did not show coal imports from South Africa in April, exports from the Richards Bay Coal Terminal (RBCT) to Vietnam swelled last month amid a collapse in demand from India, a key buyer of South African coal. RBCT exports to Vietnam jumped to a record 1.3mn t in April, up from 539,034t in March.
Vietnam's mid to long-term coal import outlook is positive. Hanoi's five-year socio-economic development plan for 2021-25 targets an average economic growth rate of 7 pc/yr. Its GDP grew by 3.82pc in January-March, and the government is aiming to achieve growth of over 5pc this year.
Growth in the power sector is also supporting the longer-term outlook for thermal coal imports. Around 3.2GW of coal capacity is under construction and scheduled for launch in 2022, while another 870MW is planned, with construction yet to start.
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Coal sales at Australia’s Whitehaven fall in Jan-Mar
Coal sales at Australia’s Whitehaven fall in Jan-Mar
Sydney, 19 April (Argus) — Australian coal miner Whitehaven reported higher production but lower sales in January-March, with the firm increasing its percentage of high-grade thermal coal sales from the previous quarter. Saleable coal volumes rose by 8pc on the year to 3.9mn t but managed coal sales fell by 7pc to 3.8mn t compared to a year earlier. Sales were 83pc high-grade thermal, higher than 72pc in October-December and 68pc a year earlier. Whitehaven said run-of-mine production at Narrabri was below expectations because of the current panel's geological challenges, leading to reliability and maintenance problems with equipment. Whitehaven's overall sales guidance for the 2023-24 fiscal year remains unchanged at 16mn-17.5mn t for 2023-24 with a unit cost guidance, excluding royalties, of A$103-113/t ($66-$72/t) which the firm said is tracking at the top end. This is because of lower output from Narrabri, which is tracking below its output guidance of 5.1mn-5.7mn t for the fiscal year to 30 June. Whitehaven finalised takeovers of Australian-Japanese joint venture BHP Mitsubishi Alliance's (BMA) 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mine in Queensland on 2 April, with initial sales and production data to be reported in its April-June production report. The two mines are anticipated to deliver 4.5mn-5mn t run-of-mine output in April-June, with Whitehaven's revenue breakdown to be 70pc metallurgical and 30pc thermal on an annual basis post-acquisition as it seeks to pivot toward coking coal. Blackwater and Daunia contributed 10.11mn t and 4mn t respectively to BMA's total output in 2023. Whitehaven plans to sell down a 20pc stake in Blackwater to global steel producers, with a process presently underway. Whitehaven views the high calorific value (CV) thermal coal market as well supported in its key Asian markets, and said tightening of sanctions on Russian exporters is containing global supply. India's continuing growth is driving demand and underpinning price sentiment, Whitehaven said, despite a softening in metallurgical coal prices during the quarter . The Argus high-grade 6,000 kcal/kg NAR price averaged $126.74/t fob Newcastle and the 5,500 kcal/kg NAR coal price $93.85/t during January-March, compared with $134.23/t and $96.80/t respectively for October-December. By Tom Major Whitehaven quarterly results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 Volumes (mn t) Managed coal production 3.9 4.2 3.6 Managed coal sales 3.8 4.7 4.1 Managed coal stocks at period end 1 1.5 1.5 Coal sales mix (%) High-grade thermal coal 83 72 68 Other thermal coal 8 19 26 Metallurgical coal 9 9 6 Prices achieved ($/t) 136 142 280 Thermal coal 136 142 280 Metallurgical coal 213 166 234 Source: Whitehaven Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Queensland legislates emissions targets
Australia’s Queensland legislates emissions targets
Sydney, 18 April (Argus) — Australia's Queensland state today approved two separate laws setting renewable energy and emissions reduction targets over the next decade, as it transitions away from a coal-fired dependent power generation system. Queensland set net greenhouse gas (GHG) emissions reduction targets of 30pc below 2005 levels by 2030, 75pc by 2035 and zero by 2050 under the Clean Economy Jobs Act, while theEnergy (Renewable Transformation and Jobs) Act sets renewable energy targets of 50pc by 2030, 70pc by 2032 and 80pc by 2035. The state is on track to surpass the 2030 emissions target, latest data show, as it achieved a 29pc reduction in 2021. Even though the share of renewables in the power mix last year was the lowest across Australia at 26.9pc, it has been increasing consistently since 2015 when it was 4.5pc, according to data from the National Electricity Market's OpenNem website. Coal-fired generation has been steadily falling, down to 42.9TWh or a 65.7pc share in 2023 from 52.9TWh or 83pc in 2018. Most of Queensland's coal-fired plants belong to state-owned utilities, which the previous Labor party-led government of Annastacia Palaszczuk indicated would stop burning coal by 2035 . The new Labor party premier Steven Miles disclosed the 75pc emissions reduction target by 2035 in his first speech as leader last December. The Energy Act locks in public ownership of electricity assets, ensuring that at least 54pc of power generation assets above 30MW remain under state control, as well as 100pc of all transmission and distribution assets and 100pc of so-called "deep storage" assets — pumped hydro plants with at least 1.5GW of capacity. The government will need to prepare and publish a public ownership strategy for the July 2025-June 2030 and July 2030-June 2035 periods. A fund totalling A$150mn ($97mn) will also be set up to ensure workers at existing state-owned coal-fired power plants and associated coal mines have access to new jobs and training or financial assistance during the transition. The Clean Economy Jobs Act sees the government receiving advice from an expert panel on the measures needed to reduce emissions. The government will need to develop and publish sector plans by the end of 2025 with annual progress reports to Queensland's parliament. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Ramaco adding production, sees market growth
Q&A: Ramaco adding production, sees market growth
New York, 16 April (Argus) — Randall Atkins is a founder and chief executive of metallurgical coal producer Ramaco Resources. He also has been involved in energy-related investment and financing activity for over 40 years. In this Q&A, edited for length and clarity, he discusses effects from the Francis Scott Key bridge collapse, his outlook for coal and the company's research projects. What effect has the Key bridge collapse and Port of Baltimore closing had on Ramaco and the US coal industry in general? Like most things of that tragic nature, it is going to take longer than everyone expects to actually solve the problem. I think where it is going to impact producers probably more is on the rails. There will be a need for...producers to rearrange stockpiles and to rearrange where they are going to try and ship, even at reduced levels. Particularly, CSX is going to have an immense logistical complexity to deal with over the near-term. We do not ship from Baltimore. We have not seen any problems, knock on wood, with our rail shipments post the incident. What are your long-term projections for metallurgical coal given expectations that low-volatile coal reserves will shrink in coming decades and the steel industry could be in oversupply? Low vol coal has traditionally been the highest priced coal and the dearest, if you will. High vol A coal has over the last few years grown in importance, and to the extent that there is any new increase in production in the US, it's high vol. What we perceive is that there is going to be a crowding in the high vol space. As a result, our increase in production is primarily in low vol. As far as the demand side is concerned, we do not believe that blast furnace steel demand is going to decline anytime soon. There's a lot of noise from the green community that hydrogen is going to replace coal in blast furnaces. We took some advice on that from the IEA…and when that question was posed (to IEA), the answer that was given was it would take about $1.5 trillion to build a pilot plant using hydrogen by 2035 and probably about another equal or greater sum to build a commercial facility by 2040. So, I don't lose a lot of sleep on the demand for coal for blast furnaces. What I do see shifting, however, is the US has held relatively steady at about 20mn short tons (18.1mn metric tonnes) of met coal demand over the last 10 to 15 years. The growth is clearly overseas, and the growth is clearly at the moment in Asia. When we started back in 2017, and 2018 was really our first year of production, we predominantly sold coal domestically; I think 80pc of our coal went to US steel mills. Now that is almost reversed. We're going to sell probably this year, 70pc overseas, and about a third or less domestically. With Europe moving towards electric arc furnace technology and significant new blast furnace capacity coming online in Asia, what kind of role will the US play as a coal supplier over the coming years? It is cheaper to use a blast furnace than electric arc. And the steel that they (Asian companies) mostly require is the heavier steel for cars and buildings and things of that nature. So, they have a bias towards blast furnace capacity. The US and Europe are very developed economies that are trying to go and wean away from coal, (while) the rest of the world is aggressively moving further into coal. People will shake their heads at the cost that European and American consumers will start to have to pay for that privilege. We see market growth is still there, but it's a different kind of growth. It will be more in the Asian markets, predominantly some in Europe, some in South America and Africa. The low vol coal demand in Asia is extremely strong because while they are able to buy high vol product from Australia very inexpensively, they do not have the low vol production. They need that to blend up to get the proper mix in their blast furnaces. There is a very good future for low vol, and that is the direction we are positioning ourselves. How confident is Ramaco about securing its investments in the longer run given the emphasis on ESG? What I see is sort of a dichotomy. In the thermal coal business, there's not a lot of investment in new mining there for the obvious reason that their customer base is declining. On the met side, it is a bit shortsighted from an investment standpoint because of the composition of the ownership of met coal companies. Virtually every major metallurgical coal producer except for us went through bankruptcy and post-bankruptcy proceedings. Their board composition became essentially distressed debt investors...Their interest was not developing a long-term coal company. Strategically their vision was: "How can we most quickly get money back out of that coal company?" We are certainly the only coal company that is doubling in size. We produced a little under 4mn st last year. We will be at about 4.5mn st this year. We can maybe go higher, depending upon the market. The market is not strong right now. The other issue (for coal producers) even when they weren't doing special dividends, is they've now shifted to doing large-scale share buybacks. You are starting to see the cost curve increase for most domestic coal producers. What you haven't seen, but I think you will probably find over the next probably 18 to 24 months, is you will begin to see depletion kick in. The amount of coal that they are able to produce from their existing operation will begin to decline. And that is strictly a result of not investing in new mine production. My approach was to kind of be a little bit of an outlier and then approach coal to products as an alternative use, certainly for thermal coal. And that, of course, brought us to rare earth (mineral extraction). Do you have funding for Ramaco's rare earth materials projects? Let me step back one step. We introduced the idea that we actually had rare earth (deposits) in May 2023….When we sent the samples to be tested, they tested them as if they were hard minerals. In other words, they did not combust off the organic material. What we have done since then, is we went back and we had samples that were probably 200-300 parts per million. From a commercial standpoint, we have kind of crossed the Rubicon that this is indeed sufficiently concentrated that it makes commercial sense. Now what we are doing is we are going through a process of further chemical analysis and testing to determine what is the best extraction and refinement technique. And the last point you raised was financing. We have a very nice growing mining metallurgical business, which can provide the funding to do whatever we want to do on rare earth. I am not too concerned about our financing capability. Any updates on your coal-to-carbon product projects ? We have looked at a number of different things with the national labs. We started looking at carbon fiber, which could be made from coal and we have got some patents around some very interesting processes. The areas that we are now focusing on...are using coal to make synthetic graphite. The other thing we are working on is using coal for direct air capture. We are considering going into a pilot phase sometime starting later this year with Oak Ridge National Laboratory on a synthetic graphite plant. As far as direct air capture, we probably have more work to do. We are also working on that with Oak Ridge. But I would hope that sometime by 2025, certainly 2026, we would perhaps have our first product, quote unquote, to be able to offer into the market. And it would be delightful if it was synthetic graphite. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australian new environment agency to speed up approvals
Australian new environment agency to speed up approvals
Sydney, 16 April (Argus) — The Australian federal government announced today it will introduce new legislation in the coming weeks to implement the second stage of its Nature Positive Plan, which includes setting up a national environment protection agency to speed up approval decisions. The planned Environment Protection Australia (EPA) will initially operate within the Department of Climate Change, Energy, Environment and Water until it transitions to become an independent statutory agency, with "strong new powers and penalties" to better enforce federal laws, the government said on 16 April. The EPA chief will be an independent statutory appointment, similar to the Australian federal police commissioner, so that "no government can interfere" with the new agency's enforcement work. The agency will be able to audit businesses to ensure they are compliant with environment approval conditions and issue environment protection orders to anyone breaking the law. Penalties will be increased, with courts able to impose fines of up to A$780mn ($504mn) or jail terms for up to seven years in cases of extremely serious intentional breaches of federal environment law. EPA will also be tasked with speeding up development decisions, including project assessments in areas such as renewable energy and critical minerals. Almost A$100mn will be allocated to optimise the approval processes, with its budget directed to support staff to assess project proposals and help businesses comply with the law. A new independent body Environment Information Australia (EIA) will also be created to provide environmental data to the government and the public through a public website. EIA will need to develop an online database giving businesses quicker access to data and helping EPA to make faster decisions. It will also need to publish state of environment reports every two years. The government said that an audit ordered by environment minister Tanya Plibersek last year found that around one in seven developments could be in breach of their offset conditions, when a business had not properly compensated for the impact a development was having on the environment, highlighting "the need to urgently strengthen enforcement". The planned new legislation is part of the federal government's reform of Australia's environmental laws including the Environment Protection and Biodiversity Conservation Act. Resource project decisions are currently made by the environment minister, with the move to an independent agency will removing any perception of political interference in such decisions, the government said when it first announced the reforms in late 2022. The first stage of the reform was completed late last year with new laws passed to create the Nature Repair Market, with further stages expected to be implemented in the future, the government said. Tight timing Resources industry body the Chamber of Minerals and Energy of Western Australia (CMEWA) welcomed the announcement that the federal government will take a "staged approach" to the implementation of the reforms but noted the timing of EPA's implementation was "tight". "We continue to hold reservations about the proposed decision-making model and will continue to advocate for a model that balances ecologically sustainable development considerations and includes the [environment] minister as the decision maker," CMEWA chief executive Rebecca Tomkinson said. The Minerals Council of Australia (MCA) said that it had been advocating for the creation of EIA, whose future collated data "will provide greater certainty and reduced costs for both government and project proponents", which "may shave years off project development". But it was cautious about potential "unintended consequences" stemming from more bureaucracy. "Australia has one of the most comprehensive environmental approvals processes in the world and the MCA has been clear about the significant risks of duplicative, complex and uncertain approvals processes pose to the minerals sector, the broader economy and the environment if we do not get this right," it warned. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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