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.
Poland seeks to accelerate decarbonisation
Poland seeks to accelerate decarbonisation
Warsaw, 5 September (Argus) — The Polish climate ministry has released for consultation its draft plan to increase investment in renewable energy and accelerate the country's exit from coal. The share of coal — including lignite — in Poland's total electricity generation would fall to 22pc by 2030, from about 61pc in 2023, according to the ministry's ambitious decarbonisation scenario, due to be published for public consultation this week. In this scenario, the share of renewables would rise to 56pc by 2030 from 23pc last year, the ministry said. The decarbonisation scenario is included in the draft of Poland's national energy and climate plan (NECP), which it intends to notify to the European Commission this month. NECPs are EU member states' national planning documents defining their decarbonisation targets and allowing the commission to monitor overall EU climate policies. The scenario is more ambitious than in an earlier Polish NECP, which it shared with the commission in March. The earlier plan indicated that renewables' share in the electricity sector will rise to 50.1pc by 2030. An acceleration of decarbonisation and more ambitious investments in renewables will eventually lead to lower electricity prices and increase the competitiveness of the Polish economy, the climate ministry said. The share of coal in Poland's power mix has declined sharply this year because of a surge in solar and wind power generation. Hard coal accounted for about 41pc of total Polish electricity generation in January-July, compared with 46pc over the same period last year, according to data from grid operator PSE. The feasibility of several coal-fired power plants will decrease from 2026, when the country's current capacity payment support mechanism ends and eligibility for another payment scheme is yet to be decided. Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Free-falling European coal prices pressure fob lower
Free-falling European coal prices pressure fob lower
London, 5 September (Argus) — A sharp decline in European thermal coal prices so far this week has placed other fob markets under downward pressure in order to price spot tons into Europe, particularly ahead of the winter heating season. Profit margins for coal-fired generation in key market Germany have risen above those of gas for the winter months, which is expected to encourage more physical trade flows to Europe, and Amsterdam-Rotterdam-Antwerp (ARA) pricing had risen accordingly to allow South African coal to flow. However, a precipitous fall in prices over Monday-Wednesday this week has closed any arbitrage opportunity and could pressure fob markets lower to hold the arbitrage open. The physical coal market was being offered much more aggressively this week and European API 2 swaps traded alongside the wider energy complex to a fresh multi-week low. Argus ' physical cif ARA NAR 6,000 kcal/kg assessment fell by $6.59/t on Wednesday to $113.58/t, its biggest one-day plunge since 22 January and the lowest price since 25 July. API 2 swaps had also fallen on Wednesday but marked a less sharp drop than the physical market. The curve lost an average $2.83/t and volume via the Intercontinental Exchange continued its recent form, spiking to more than 3mn t. The European market is relatively small in terms pf physical volume, but a period of low demand form larger Asian markets has placed more importance on European demand for the marginal spot ton. Bids for South African fob Richards Bay NAR 6,000 kcal/kg coal were seen today at $95-98/t fob for October and November loading, relatively in-line with the past few weeks; however, offers were much lower, seen at $112/t for November today, from $122.50/t a week earlier. This could keep spot fob pricing under pressure, following the European market for some time to come, although should levels move closer to the $100/t level it is expected that Indian demand would return and begin to compete for spot tons. Looking forward, European coal pricing is expected to be strongly linked to a finely balanced natural gas market, which appears to be highly sensitive to supply-side risks in recent months. This means coal trade could be dictated by more than purely coal-driven fundamentals but could also stand to benefit from increased liquidity in the European market. By Shreyashi Sanyal Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Asia's coal phaseout needs emissions disclosures: IEEFA
Asia's coal phaseout needs emissions disclosures: IEEFA
Singapore, 5 September (Argus) — The phasedown of Asian coal-powered plants requires stricter emissions disclosures, which will in turn reduce investment, said speakers at an Institute for Energy Economics and Financial Analysis (IEEFA) conference this week. One of the biggest short-term challenges for coal-fired abatement is that the coal price has halved from about $240/t to about $130/t right now, said energy finance analyst at IEEFA, Ghee Peh, on 3 September at the IEEFA Energy Finance 2024conference in Kuala Lumpur, Malaysia. The greater shift towards renewable energy means that demand for coal-fired power is falling, but coal plants are still profitable and coal prices will eventually rebound as new supply is limited. "So what we can do as a larger group is to continue to pressure the financing side," said Peh. This can be done by encouraging greater emissions disclosure, which will then influence investors' decisions, he added. "The good news is that in Asia, Singapore, Hong Kong are moving towards disclosures by next year on Scope 1, 2 and 3 emissions, so investors will know how much a company emits, and that will contribute to a very decisive investor response," said Peh, adding that local regulators should put the onus on companies to disclose their emissions as soon as possible. Coal-mine methane emissions Methane is one of the most potent greenhouse gases (GHGs) and coal mining is one of the biggest sources of methane emissions. Just over 40mn t of coal-mine methane (CMM) was released into the atmosphere in 2022, according to IEA data, representing more than 10pc of total methane emissions from human activity. The EU approved a regulation on 27 May that requires the measuring, reporting and verifying of methane emissions from coal, oil and fossil gas exploration and production, distribution and underground storage, including LNG. It also establishes equivalence of methane monitoring, reporting and verification measures from 1 January 2027, and EU importers by mid-2030 have to demonstrate that the methane intensity of the production of crude, natural gas and coal imported to the EU is below maximum methane intensity values. It is therefore important to address CMM as this affects countries in Asia, said independent global energy think tank Ember's CMM programme director Eleanor Whittle. At the moment, none of the 10 biggest exporting countries to the EU meet its standards. But CMM emissions are rarely ever reported or even properly measured, she added, and measuring CMM could even double companies' reported emissions. "We did research that found that in Australia, a shift to company-led emissions reporting — but without verification — meant that overnight, hundreds of thousands [of tonnes] of carbon dioxide equivalent in the form of methane were erased, but without any mitigation or change in coal mining," said Whittle. This shows that even without improvements in the framework methane measurement and verification frameworks, policy shifts like these can still have a profound impact on short-term warming, she said. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Dartbrook mine to restart in ‘coming weeks’
Australia's Dartbrook mine to restart in ‘coming weeks’
Singapore, 5 September (Argus) — Australian mining firm Australian Pacific Coal (AQC) is planning to restart its Dartbrook thermal coal mine soon after multiple attempts to do so over the past five years. The underground mine produced and transported coal to the surface on 4 September, the first time since it was placed into care and maintenance in 2006, AQC said on 5 September. The Dartbrook mine is located in the Hunter valley coal mining region in New South Wales. It could potentially produce 5mn t/yr of thermal coal . AQC had installed and tested a 4km conveyor system designed to transport coal produced from the Kayuga seam to the surface via the Hunter Tunnel. The coal will then be processed at a handling and preparation plant. "Commissioning is under way and the team on the ground is working hard to bring the mine safely into commercial production in the coming weeks," said AQC managing director and chief executive Ayten Saridas. Dartbrook will initially only produce unwashed thermal coal for sale to domestic or export customers when it resumes operations, the company said. Once the coal handling and preparation plant is refurbished early next year, the mine will produce washed and graded coal with high-calorific values (CV) for export. It may also produce semi-soft or pulverised coal injection coal. Dartbrook was placed into care and maintenance by its previous owner, UK-South African mining firm Anglo American, in 2006 when high-CV NAR 6,000 kcal/kg coal was as low as $50/t fob Newcastle. AQC had hoped to restart the mine in 2019 but was delayed by opposition from local communities and a fraught approvals process. Australian high-CV coal prices have rallied recently on concerns regarding natural gas supplies arising from the Russia-Ukraine conflict. Argus last assessed the price of NAR 6,000 kcal/kg coal at $143.92/t fob Newcastle on 30 August. By Jinhe Tan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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